MG411 One Unit
Firms and Markets
This information is for the 2025/26 session.
Course Convenor
Prof Rocco Macchiavello
Prof Kristof Madarasz
Availability
This course is compulsory on the MSc in Economics and Management. This course is not available as an outside option to students on other programmes.
Course content
A graduate course in microeconomic analysis, geared towards those parts of the subject that are of primary importance in the Management area. The first section focuses on competition between firms, using standard game theoretic models. This leads to a general treatment of market competition by reference to the concept of firms' capabilities. The next section traces the basis of firms' capabilities to the set of elements of know-how possessed by the individuals comprising the firm, and by the mode of internal organisation of those individuals. The analysis draws on the several strands in the modern literature on the theory of the firm. The final section of the course deals with the link between strategy and structure, and with the formulation of strategies in environments characterised by complexity and uncertainty.
The course syllabus covers Walrasian Equilibrium: Supply and Demand. Beyond the Walrasian model: Nash Equilibrium. Applications of Nash Equilibrium: options and bargaining. General approaches to the analysis of competition in oligopolistic markets. Applications in Industrial Organisations. The concept of capabilities. The roots of firms' capabilities : individuals and their collective know-how. The internal organization of firms. Contract theoretic approaches to the theory of the firm. The Chandlerian nexus: from strategy to structure.
Teaching
20 hours of lectures, 20 hours of classes and 15 hours of seminars in the Winter Term.
20 hours of lectures, 18 hours of classes and 7.5 hours of seminars in the Autumn Term.
This course has a reading week in Week 6 of Autumn and Winter Term.
A weekly seminar devoted to problem sets. A weekly seminar devoted to case studies.
In its Ethics Code, LSE upholds a commitment to intellectual freedom. This means we will protect the freedom of expression of our students and staff and the right to engage in healthy debate in the classroom.
Indicative reading
Milgrom and Roberts, Economics, Organization and Management; Sutton, Sunk Costs and Market Structure.
Assessment
Exam (100%), duration: 180 Minutes in the Spring exam period
Key facts
Department: Management
Course Study Period: Autumn and Winter Term
Unit value: One unit
FHEQ Level: Level 7
CEFR Level: Null
Total students 2024/25: 32
Average class size 2024/25: 32
Controlled access 2024/25: YesCourse selection videos
Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.
Personal development skills
- Leadership
- Self-management
- Team working
- Problem solving
- Communication
- Application of numeracy skills
- Commercial awareness