Industrial Organisation is concerned with the behavior of firms on markets with imperfect competition. The first part of the course looks at how market conditions determine the characteristics of the products available on the market (both in terms of the quality and the location of the sellers), as well as the price and output levels selected by the firms. Specific attention is played to how firms can actively change the market structure through mergers and acquisitions or other modes of coordination (such as implicit or explicit collusion), as well as through strategies aimed at deterring entry or securing a dominant market position. In each scenario, the welfare consequences with regard to the producers and consumers on the market are discussed, in order to reflect on the potential effects of policy interventions on behalf of a regulator, as well as the optimal instruments for such interventions.
In the second half of the lecture students are encouraged to apply the models to industries with specific characteristics (e.g. two-sided markets such as platforms) or to analyze the effects of specific policy decisions (e.g. trade liberalization).
Upon graduating this course, students should be able to use the economic reasoning elaborated in models of industrial organisation to predict how firm behavior responds to changes in the competitive environment. Furthermore, they should be aware of the potential sources of market failure on markets with imperfect competition, as well as the policy instruments available to regulators monitoring such markets.
This course is a course with continuous assessment (PI), therefore attendance is necessary. Two lectures can be missed without excuse, absence in further lectures has to be excused/ explained via email.
The lecture consists of two parts. In the first part of the lecture, the models of firm behavior are presented by the lecturer and students are encouraged to demonstrate their understanding of the material through the use of homework assignments, as well as written exams.
In the second part of the lecture, the focus shifts to case studies and extensions of the models learned in the first part. This part of the lecture includes student presentations on specific industries and policies.
Mid-term exam (35%)
Final exam (35%)
Homework assignments (10%)