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Competitive Advantage & Strategic Interactions

  • Enseignant(s):  
  • Titre en français: Les avanctages compétitifs et les interactions stratégiques
  • Cours donné en: anglais
  • Crédits ECTS:
  • Horaire: Semestre de printemps 2019-2020, 4.0h. de cours (moyenne hebdomadaire)
  •  séances
  • site web du cours site web du cours
  • Formations concernées:
    Maîtrise universitaire ès Sciences en management, Orientation stratégie, organisation et leadership

    Maîtrise universitaire ès Sciences en management, Orientation comportement, économie et évolution

    Maîtrise universitaire ès Sciences en management, Orientation marketing

    Maîtrise universitaire ès Sciences en management, Orientation business analytics



The goal of this course is to introduce you to a wide variety of problems managers face in their every-day life. I expect you to develop an economic intuition for these problems and apply this intuition to concrete situations you will face at work. To achieve this objective, we will complement the study of the economic models mentioned above with applications of these models to concrete examples, extracted from newspaper articles and case studies.


During this course, we will cover three broad topics. The first is firm behavior in oligopoly market configurations. The second is price discrimination. The third is market failures.

I will start this course with a quick refresher of perfect competition, monopoly, and monopolistic competition. While these industry structures are characterized by the fact that producers do not interact with each other, oligopolistic competition, which is the next concept I will cover, is characterized by the fact that firms strategically interact with each other. Thus, under oligopoly, firms’ optimal choices regarding price and quantities have to take into account the reactions of the other market players. To fully understand oligopoly, I will introduce the principles of game theory. In fact, game theory is a branch of mathematics that studies interactions among players, including firms. I will cover simultaneous games to introduce oligopoly models such as Cournot’s and Bertrand’s models. I will then discuss sequential games to introduce the famous Stackelberg’s oligopoly model. Finally, I will cover games that are repeated a finite and an infinite number of times to explain the notions of punishment and reputation, which are fundamental concepts regulating the behavior of oligopolistic market players.

In the second part of this course, I will cover the notion of price discrimination. The basic idea is that firms with market power have an incentive to extract as much surplus as possible from their potential customers, based on the information they possess about the latter’s willingness to pay. In the most extreme form of price discrimination, firms charge each consumer his or her willingness to pay. This strategy is, most of the times, unfeasible as it requires a precise knowledge of the consumers’ willingness to pay. Unfortunately, this information is extremely costly to acquire. There are several other strategies, however, which are less costly and, thus, more frequently used. We will examine them, in details.

In the last part of the course, I will introduce the notion of market failures. I will first discuss market failures stemming from asymmetric information. This is a very hot topic: most of the Nobel Prize winners in the past decade have researched in this field. Within this topic, I will briefly cover concepts such as markets for lemons, signals, and moral hazard. Finally, I will cover another very famous source of market failure, externalities, and I will specifically discuss it in relation to public goods.


(1) Austan Goolsbee, Steven Levitt, Chad Syverson, Microeconomics, Worth Publishers, Second Edition, 2016

(2) Notes provided by the instructor before class

(3) Newspaper and academic articles: references provided in the syllabus

(4) The Art of Strategy, Avinash Dixit and Barry Nalebuff, Norton

(5) Great Negotiations: Agreements that Changed the Modern World, Fredrik Stanton, Westholme

(6) Case studies: references provided in the syllabus (link to case studies:


Good knowledge of economic principles


1ère tentative

Sans examen (cf. modalités)  
SUMMER 2020, due to coronavirus

Multiple choice take home exam. Details provided in the updated syllabus


Sans examen (cf. modalités)  

Multiple choice take home exam. Details provided in the updated syllabus

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