Using Problem Based Learning (PBL) to teach Industrial Economics

Contact: John Sedgwick
London Metropolitan University
Published January 2007, spreadsheet link added March 2009

For the last two academic years I have used PBL techniques to teach Industrial Economics to final year undergraduates on the North Campus of London Metropolitan University. The experiment has been mirrored by my colleague Guglielmo Volpe in a final year module he leads called Economic Growth and Economic Fluctuations and together they form the basis of a mini project supported by the Economics Network. Guglielmo's module precedes mine, so by the time that they come to me they will already have experienced a PBL environment - albeit one that gives students more step-by-step guidance than the get from me.

My module in Industrial Economics is broken down into two parts. Part A consists of an intensive teaching block of five weeks based upon the theoretical frameworks found in Utton (2003) and Martin (1988). In this block students are re-acquainted with the Marshallian/Pigovian concepts of market structure, power and welfare, all framed within the context of Cournot equilibrium. Particular attention is given to lines of causality linking market conditions, to structure, to performance. The waters are then muddied by allowing firms to be strategic entities, which under particular circumstances are able to affect their own outcomes. In this approach, demand is also determined by endogenous factors. I use the Sutton (1991) analytical framework to show this.

Part B runs through weeks 6 to 11 and is dedicated to resolving a problem. Students are given a large dataset of all (4,000 plus) movies released onto the North American market between 1988 and 1999, including information for each about their distributor, and their box-office revenue and, for approximately half the films, their estimated cost of production. The students are also introduced to the work of Arthur De Vany (2004), who with various collaborators, including David Walls, has written a series of articles in which they analysed the peculiar characteristics of the movie industry, finding that the standard approach to industrial organisation, with respect to that industry, is inadequate. The data and the articles are posted on a dedicated website for students taking the module. Students are asked to evaluate critically De Vany's thesis, using the industry dataset.

Part B is organised as a workshop. (I am unhappy about forcing students into groups, so I allow students to work in those combinations that best serve them. I expect students to collaborate, even where they choose to work on their own). Students are expected to produce a 2,000 word paper in week 12, in which they address the problem. No other guidance is given.

The main teaching effort that takes place in Part B, is supporting individuals/groups to structure their paper. Students are expected to use the knowledge and skills that they have acquired as second semester final year students to make their own analytical and conceptual connections. Generally, I will spend 10-15 minutes each week answering generic questions and explaining economic principles. Where students take wrong tracks, or lose themselves, I try to nudge them towards what I consider a more profitable direction.

The intention of the PBL design is to give students the opportunity to apply creatively and holistically knowledge and learning to a dense problem/issue, and that in so doing learn how to shape a research paper of merit.

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