37297 - INDUSTRIAL ORGANIZATION

Conoscenze e abilità da conseguire

At the end of the course students are able to understand firm behavior at the strategic level for what concern pricing, market equilibrium, investments and innovation. The course will introduce studnets to studying organisational issues related to incentives and agency theory.

Contenuti

Learning Outcomes

At the end of the course students should be able to:

- describe the basic questions, models, and methods asked in industrial organization

- discuss the basic framework of competition policy, as applied to market definition, merger assessment, and anti-competitive behaviors

- analyze market structure, using concentration measures and assessment of an industry’s structural factors

- use basic game theoretic tools to analyze strategic situations

- apply standard economic models to understand firm decisions and strategies

Prerequisites

The course assumes that students are familiar with basic microeconomic models (perfect competition, monopoly) and are comfortable with using algebra and basic calculus (e.g. linear systems of equations, derivatives and partial derivatives, optimization problems in one and two variables).

Course Contents

The course is taught in two modules. Module 1 focuses on providing students with the analytical tools used in Industrial Organization. Module 2 uses the tools taught in the first module to analyze industrial structure and firm strategy, through the lens of competition policy.

The topics covered in each module will include the following.

Module 1: Theoretical Tools for Industrial Organization

1. Review of consumer theory and producer theory

2. Perfect competition and efficiency

3. Monopoly and market power

4. Game theory: games in normal form, Nash Equilibrium

5. Theories of Oligopoly: Bertrand and Cournot competition

6. Game theory: games in extensive form, Subgame Perfect Nash Equilibrium, games in repeated form

7. Theories of Oligopoly: collusion when interactions are repeated

Module 2: Market Power in Practice

8. Competition policy and regulation

9. Measuring market structure and market Power

10. Horizontal and vertical Mergers

11. Market foreclosure and anticompetitive behavior

12. Pricing strategies: Predatory pricing, price discrimination, and non-linear pricing

13. Non-pricing firm strategy: Branding and product differentiation

Testi/Bibliografia

L. Cabral, Introduction to Industrial Organization, second edition, Mit Press, 2017.

 

Additional materials may be drawn on for specific parts of the course. These will be announced in class.

Metodi didattici

Standard frontal teaching. Students with disabilities or specific learning disabilities (DSA) are expected to request appropriate accommodations as early as possible during the class so adjustments can be made accordingly.

Modalità di verifica e valutazione dell'apprendimento

The course will be evaluated using written exams, conducted in presence. They will last approximately 60-90 minutes and will include a combination of exercises and other questions.

In order to pass the written exam, students have two possibilities:

1. Take only the general exam in December, January, or September.

2. Take the partial midterm exam at the end of Module 1 and a second partial midterm exam in December or January (of the same academic year).To enrol in the second partial midterm, students must score at least 9/16 in the first partial midterm.

Each module will be graded separately, out of 16. The total score for the course will be the sum of the scores received for each module. Students must pass both modules to pass the course. In addition to the written exam, there may be an option to receive points through class engagement.

Students may only enrol in a midterm exam if they have not enrolled in any previous exam in this course (either the midterm or the final). Students can reject their final grade once. To reject their grade, they must complete the online form provided by the instructor after the exam, within the relevant time period (any such requests submitted by email may be ignored unless otherwise stated).

The grade is scaled as follows:

<18 failed

18-23 sufficient

24-27 good

28-30 very good

30 e lode excellent

Strumenti a supporto della didattica

Textbook, slides and exercises.

Orario di ricevimento

Consulta il sito web di Jonathan Neil Chapman

Consulta il sito web di Annalisa Loviglio