Students will learn the basics of industrial economics. More specifically, students will be able to understand and evaluate the economic issuess related to the strategic behavior of firms with market power. The topics will range from pricing decisions (price discrimination, bundling and tie- in-sales), to anti-competitive behaviour (collusion, mergers and restraints).
The main questions that the course answers are as follows:
- What are the sources of market power?
- What strategies can firms adopt to acquire or maintain market power?
- What are the implications of market power and what is the role of the regulator in relation to it?
The objective of the course is to develop the skills necessary to conduct analyzes to identify the determinants of the industrial structure and interpret the market strategies implemented by firms with a focus on the implications in terms of industry efficiency and consumer and social welfare.
Basic knowledge of Microeconomics
Teaching activities include lectures, opportunities for interaction and discussion with students, as well as classes devoted to the application of the theoretical models presented during the course.
The student evaluation is based on a written exam paper. The written exam lasts about 1h30' and it is organized in multiple choice questions and structured exercises with the application of formulae, graphical analysis, definition of concepts and the critical discussion of the results.
- Market structure and monopoly power
- Price discrimination under monopoly
- Product variety and quality under monopoly
- Quantity and price competition with asymmetric costs, capacity constraints and differentiation
- Sequential price interaction with product differentiation
- Limit pricing and entry deterrence
- Predatory behavior
- Collusion
- Horizontal and vertical mergers
- Vertical restrictions
