Objectives

The course consists of three parts.

In the first part of the course we study non-strategic market behavior, i.e. situations where a firm takes the actions of rivals as given, which leads us to an in-depth discussion of market power and more specifically monopoly power.

In the second part of the course we study models of strategic interaction in imperfectly competitive markets. The main modelling tool is game theory. The choice of topics includes well known issues in competition policy practice such as collusion, but also some very recent research areas like platforms. Before the beginning of this part, you should refresh your knowledge of Game Theory.

In the third part of the course students are invited to explore and present to the rest of the class a topic of their interest. This part enables all students to experience how formal investigation can help them better understand real world markets, and a wide range of topics of their interest can be covered.

Contents

1. Introduction to the 1st Part. Microeconomic fundamentals. Monopoly
2. Monopoly contd
3. Pricing strategies
4. Vertical Relations
5. 2nd Part. Game theory review. Short-run oligopoly models
6. Dynamic Price Competition and Tacit Collusion
7. Product Differentiation
8. Strategy, information and market entry
9. Research and development (R&D)
10. Two-sided markets (platforms)
11. 3rd Part. Student Presentations and Feedback

References

Jean Tirole, The Theory of Industrial Organization, Cambridge, Massachusetts, The MIT Press.

Paul Belleflamme and Martin Peitz, Industrial Organization: markets and Strategies, Cambridge, United Kingdom, Cambridge University Press.

Additional readings specific to each topic will be handed out during the course.

Pre-requisites

Microeconomic Theory (Analyse économique: Microéconomie)

Evaluation

First attempt

Exam:

Without exam (cf. terms)  

Evaluation:

There is no exam.

The grade is based on:

• homework component (60%)

with PS1 (20%), PS2 (20%), and PS3 (20%);

• journal article discussion component (40%)

with class presentation (20%), and short written report (20%).

The homework component of the three problem sets (PS) is individual.

The journal article discussion comprises i) a class presentation of a journal article and ii) a short written report based on the same article and its presentation.

Retake

Exam:

Written 2h00 hours

Documentation:

Not allowed

Calculator:

Allowed with restrictions

Evaluation:

The retake exam is written and closed book. The duration is 2 hours. The retake exam determines 100% of your final grade.