Industrial Organization

ECONOMICS Industrial Organization

0222200027
DEPARTMENT OF ECONOMICS AND STATISTICS
EQF7
ECONOMICS
2022/2023

OBBLIGATORIO
YEAR OF COURSE 1
YEAR OF DIDACTIC SYSTEM 2018
SPRING SEMESTER
CFUHOURSACTIVITY
1060LESSONS
Objectives
THE COURSE AIMS AT PRESENTING FIRMS’ BEHAVIOUR AND MARKET OUTCOMES IN IMPERFECTLY COMPETITIVE INDUSTRIES.
THE OBJECTIVE IS TO PROVIDE STUDENTS WITH A SET OF TOOLS, CONCEPTS, AND THEORY ALLOWING THEM TO UNDERSTAND THE MAIN PROBLEMS OF THE ECONOMICS OF COMPETITION AND THE DIFFERENT REASONS UNDERLYING THE GOVERNMENT REGULATION IN SOME ECONOMIC SECTORS.
THEIR MAIN ACQUIRED KNOWLEDGE WILL BE:
- THE DIFFERENCES BETWEEN COMPETITIVE MARKETS AND MONOPOLISTIC/OLIGOPOLISTIC MARKETS IN TERMS OF FIRMS’ CONDUCT AND PERFORMANCE;
- THE ROLE AND IMPORTANCE OF STRATEGIC CHOICES FOR PRESERVING FIRMS’ MARKET POWER (PRICE DISCRIMINATION, QUALITY, ADVERTISING, R&D, MERGERS, ENTRY BARRIERS);
- THE RELEVANCE OF STRATEGIC INTERACTION AMONG FIRMS IN OLIGOPOLISTIC MARKETS;
- THE CONDITIONS UNDER WHICH GOVERNMENT INTERVENTION IN A MARKET MIGHT INCREASE SOCIAL WELFARE.
STUDENTS’ MAIN ACQUIRED SKILLS (I.E. THEIR ABILITY OF APPLYING KNOWLEDGE AND UNDERSTANDING) WILL BE:
- TO IDENTIFY FIRMS’ BEHAVIOURS THAT FOLLOW THE ADOPTION OF SPECIFIC STRATEGIES;
- TO ASSESS THE IMPACT OF ENTREPRENEURIAL CHOICES IN TERMS OF PROFITS AND OVERALL SOCIAL WELFARE;
- TO INTERPRET THE WAY OF REASONING AND ACTING OF THE DIFFERENT PARTICIPANTS IN REAL MARKETS, PARTICULARLY FIRMS AND ANTITRUST AUTHORITIES;
- TO ALLOW A COMPARISON BETWEEN THE ENTREPRENEURS’ POINT OF VIEW AND THE ECONOMISTS’ POINT OF VIEW.
Prerequisites
IT IS REQUIRED A SOLID BACKGROUND KNOWLEDGE IN MICROECONOMICS AND MATHEMATICS FOR ECONOMISTS.
Contents
- INTRODUCTION TO INDUSTRIAL ORGANIZATION (2 HOURS)
- PERFECT COMPETITION, MONOPOLY, TECHNOLOGY AND COST, MARKET POWER (8 HOURS)
- PRICE DISCRIMINATION (6 HOURS)
- PRODUCT VARIETY AND QUALITY UNDER MONOPOLY (4 HOURS)
- GAME THEORY AND STRATEGIC INTERACTIONS (6 HOURS)
- THE MAIN OLIGOPOLY MODELS (10 HOURS)
- ENTRY DETERRENCE AND PREDATORY CONDUCT (6 HOURS)
- COLLUSION AMONG FIRMS (8 HOURS)
- HORIZONTAL MERGERS, VERTICAL MERGERS AND VERTICAL RESTRAINTS (4 HOURS)
- ADVERTISING AND R&D (4 HOURS)
- MARKET REGULATION (2 HOURS)
Teaching Methods
THE COURSE COMPRISES 60 HOURS OF LECTURES (10 CREDITS). DURING LECTURES THERE WILL BE TIME ALSO FOR EXERCISES AND OTHER PRACTICAL APPLICATIONS RELATED TO CASE STUDIES. ALTHOUGH NOT COMPULSORY, ATTENDING THE LECTURES IS HIGHLY RECOMMENDED.
Verification of learning
STUDENTS’ PERFORMANCE IS ASSESSED THROUGH A BOTH WRITTEN AND ORAL COMPREHENSIVE EXAM (POSSIBLY HELD IN DIFFERENT DAYS, THE WRITTEN EXAM IS PREPARATORY TO THE ORAL ONE). FOR EACH OF THEM THE MINIMUM PASSING GRADE IS 18/30, AND THE FINAL MARK WILL BE THE AVERAGE OF THE TWO.
THE WRITTEN EXAM IS 90 MINUTES IN DURATION (MINIMUM), AND IS AIMED AT ASSESSING – IN A TRANSPARENT AND OBJECTIVE MANNER – STUDENTS’ KNOWLEDGE OF THE KEY ISSUES PROVIDED DURING THE COURSE AS WELL AS THEIR ABILITY OF APPLYING SUCH CONCEPTS. IT CONSISTS OF FOUR QUESTIONS: TWO EXERCISES, AND TWO OPEN QUESTIONS. THEY ARE SIMILAR TO THOSE DISCUSSED AND SOLVED DURING LECTURES AND/OR PUBLISHED ON THE COURSE WEB PAGES.
BOOKS, LECTURE NOTES, COMPUTERS, MOBILE PHONES, TABLETS AND SMARTPHONES ARE ALL FORBIDDEN DURING THE WRITTEN EXAM. ONLY HAND CALCULATORS ARE ALLOWED.
THE ORAL EXAM IS ABOUT 15 MINUTES IN DURATION. IT INCLUDES THE DISCUSSION OF THE WRITTEN ANSWERS AS WELL AS POSSIBLE QUESTIONS ON OTHER ITEMS ON THE PROGRAMME, AND IS ALSO INTENDED AT ASSESSING STUDENTS’ ABILITY OF USING APPROPRIATE LANGUAGE AND TERMS.
FOR COURSE ATTENDANTS, THERE IS THE POSSIBILITY OF MID-COURSE AND END-COURSE WRITTEN EXAMINATIONS PLUS A FINAL ORAL EXAM, WHOSE CHARACTERISTICS ARE THE SAME AS THOSE BEFORE.
OVERALL, FOR THIS COURSE THE EVALUATION CRITERIA FOR ASSESSING STUDENTS’ LEARNING ARE:
- KNOWLEDGE OF THE INDIVIDUAL TOPICS;
- CAPACITY TO CONNECT THE VARIOUS TOPICS;
- ABILITY TO USE MATHEMATICS;
- CLARITY AND EFFECTIVENESS OF EXPOSITION;
- USE OF A PROPER TECHNICAL LANGUAGE.
Texts
MAIN REFERENCE:
- L. PEPALL, D.J. RICHARDS, G. NORMAN, INDUSTRIAL ORGANIZATION, BLACKWELL, 2013
OTHER REFERENCES:
- L. CABRAL, INTRODUCTION TO INDUSTRIAL ORGANIZATION, MIT PRESS, LAST ED.
- D.W. CARLTON, J.M. PERLOFF, MODERN INDUSTRIAL ORGANIZATION, PEARSON, LAST ED.
- P. GARELLA, L. LAMBERTINI, ORGANIZZAZIONE INDUSTRIALE, CAROCCI, LAST ED.
- M. GRILLO, F. SILVA, IMPRESA CONCORRENZA E ORGANIZZAZIONE, CAROCCI, LAST ED.
- O. SHY, INDUSTRIAL ORGANIZATION, MIT PRESS, LAST ED.
- J. TIROLE, THE THEORY OF INDUSTRIAL ORGANIZATION, MIT PRESS, LAST ED.
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