Industrial Organization and Competition Policy

2018-2019

Course Objective

This course is designed to give students an overview of the mainstream
theory of Industrial Organization.

After following this course, students
- can define and recognize main types and determinants of market
structure
- can name and explain the determinants of the actions taken by firms
and are able to explain the relationships between firms' actions and
market outcomes
- are able to apply mathematics, game theory, welfare analysis and
micro-economic tools to analyze the problem of collusion, entry and exit
decisions, vertical control, product differentiation, and adoption of
new technologies issues
- can describe and analyze (both analytically and graphically) the main
models used for analysis of strategic behavior of firms under asymmetric
information
- are able to determine optimal firm and regulator behavior conditional
on the type of market structure and nature of competition in the market
and draw policy conclusions
- can understand and critically assess the academic literature and
recognize
important contributions to the field of industrial organization
- can present research findings to expert and non-expert audiences

Course Content

Many markets of interest are dominated by only few firms. These firms
not only choose their prices and outputs, but also the quality and
design of their products, engage in advertising campaigns and make
investments in R&D. They also decide on whether to enter or exit
markets, whether to merge, vertically integrate, or to collude with
rival firms. These choices have strong effects on the markets, in which
firms operate, and may also have wider repercussions throughout the
economy. This course presents an approach - based on strategic decision
making - for understanding the functioning of such markets. We also use
this approach to clarify the role of the government in regulating
economic activity.

This course is designed to give students an overview of the mainstream
theory of Industrial Organization, to provide students with insights in
the organization of markets, and to give an overview of the main
analytical tools used for analysis of imperfectly competitive markets.
The course is primarily theoretical. At the same time, a number of
empirical and experimental results will be discussed.

Part 1 of the course concerns non-strategic industrial organization and
consists of the theory of the firm, analysis of monopoly power, price
discrimination and vertical integration. Part 2 studies strategic
industrial organization. The topics are static oligopoly models, dynamic
price competition, spatial competition and advertising,
incumbent/entrant behavior, R&D and adoption of new technologies. Also
substantial attention will be devoted to applications of the IO tools
for analysis of Competition policy. There we will focus on European and
US competition law, collusion, abuse of dominant position, and mergers.

Teaching Methods

Lectures
Workshops and assignments

Method of Assessment

written interim examination - 75% of the final grade
problem sets and workshop presentations – 25% of the final grade

Entry Requirements

Microeconomics course

Literature

Tirole, J. (1988), The Theory of Industrial Organization. MIT Press.
Motta, M. (2004), Competition Policy: Theory and Practice, Cambridge
University Press.
Reader with articles provided on Canvas

Recommended background knowledge

Bachelor level courses in Industrial Organization

General Information

Course Code E_EC_IOCP
Credits 6 EC
Period P4
Course Level 400
Language of Tuition English
Faculty School of Business and Economics
Course Coordinator dr. E.I. Motchenkova
Examiner dr. E.I. Motchenkova
Teaching Staff dr. E.I. Motchenkova

Practical Information

You need to register for this course yourself

Last-minute registration is available for this course.

Teaching Methods Lecture
Target audiences

This course is also available as: