NYU Stern School of Business

Undergraduate College


Spring 2012

Instructor Details

Gavazza, Alessandro


By Appointment

KMC 7-81


Course Meetings

MW, 9:30am to 10:45am

Tisch T-LC21

Final Exam:

Schedule exceptions
    Class will not meet on:
    Class will meet on:


Course Description and Learning Goals

This course takes a formal approach to analyzing the way firms
make production and sales decisions and interact strategically with each other in the marketplace.  We begin
with a study of optimal pricing policies, including versioning, bundling, and related market
segmentation strategies. In the second part of the course, we apply game theory to the study of oligopoly
interaction, focusing on pricing and output strategies in a dynamic setting.  Finally, we analyze
strategies for firm dominance, especially through the deterrence of potential competition.  The
list of such strategies includes capacity expansion, product proliferation, and exclusive dealing

The main goal of the course is to develop the basic intuition for pricing and other forms of
strategic behavior on the part of firms, both when faced with complex patterns of consumer demand and when faced with strategic


Course Pre-Requisites

The course in primarily targeted at junior and senior students.  It presupposes familiarity with basic algebra and calculus, as well as basic microeconomic analysis.  Students are required to have taken a semester of microeconomics.  Students are also expected to be comfortable with basic algebra and calculus, including systems of equations and derivatives.


Course Outline

The topics developed in the course include: Introduction and overview;  Basic pricing; Price
discrimination by indicators and by self-selection;  Static and dynamic oligopoly competition (tacit collusion and
cartels); Strategic behavior, entry and exit: entry deterrence, predatory pricing, mergers.  A more complete description will be available in a course outline available at http://pages.stern.nyu.edu/~agavazza/outlineFall2010.pdf .


Required Course Materials

The required text is Cabral, Luis, Introduction to Industrial Organization, MIT Press, 2000.


Assessment Components

There will be two tests, given in class, each covering approximately one half of the course material.
There will also be four problem sets assigned throughout the semester.
Please note that there are no make-up exams in this course. Students are responsible for checking the test dates
and avoid any conflict with other commitments. 

Grading will be based on the two tests (40% each), as well as class participation (20%).  Problem sets will be grated on a check/+/- basis.



At NYU Stern we seek to teach challenging courses that allow students to demonstrate their mastery of the subject matter.  In general, students in undergraduate core courses can expect a grading distribution where: 

Note that while the School uses these ranges  as a guide, the actual distribution for this course and your own grade will depend upon how well  you actually perform in this course.



The process of assigning grades is intended to be one of unbiased evaluation. Students are encouraged to respect the integrity and authority of the professor’s grading system and are discouraged from pursuing arbitrary challenges to it.

If you believe an inadvertent error has been made in the grading of an individual assignment or in assessing an overall course grade, a request to have the grade re-evaluated may be submitted. You must submit such requests in writing to me within 7 days of receiving the grade, including a brief written statement of why you believe that an error in grading has been made.


Professional Responsibilities For This Course




In-class contribution is a significant part of your grade and an important part of our shared learning experience. Your active participation helps me to evaluate your overall performance.
You can excel in this area if you come to class on time and contribute to the course by:




Classroom Norms


Stern Policies

General Behavior
The School expects that students will conduct themselves with respect and professionalism toward faculty, students, and others present in class and will follow the rules laid down by the instructor for classroom behavior.  Students who fail to do so may be asked to leave the classroom. 


Collaboration on Graded Assignments
Students may not work together on graded assignment unless the instructor gives express permission. 


Course Evaluations
Course evaluations are important to us and to students who come after you.  Please complete them thoughtfully.


Academic Integrity

Integrity is critical to the learning process and to all that we do here at NYU Stern. As members of our community, all students agree to abide by the NYU Stern Student Code of Conduct, which includes a commitment to:

The entire Stern Student Code of Conduct applies to all students enrolled in Stern courses and can be found here:

Undergraduate College: http://www.stern.nyu.edu/uc/codeofconduct
Graduate Programs: http://w4.stern.nyu.edu/studentactivities/involved.cfm?doc_id=102505

To help ensure the integrity of our learning community, prose assignments you submit to Blackboard will be submitted to Turnitin.  Turnitin will compare your submission to a database of prior submissions to Turnitin, current and archived Web pages, periodicals, journals, and publications.  Additionally, your document will become part of the Turnitin database.


Recording of Classes

Your class may be recorded for educational purposes


Students with Disabilities

If you have a qualified disability and will require academic accommodation of any kind during this course, you must notify me at the beginning of the course and provide a letter from the Moses Center for Students with Disabilities (CSD, 998-4980, www.nyu.edu/csd) verifying your registration and outlining the accommodations they recommend.  If you will need to take an exam at the CSD, you must submit a completed Exam Accommodations Form to them at least one week prior to the scheduled exam time to be guaranteed accommodation.


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