Updated A.Y. 2021-2022
The module aims at illustrating how to use economic theory to study how markets works, and how managers, policy makers or individual workers or consumers should take market decisions.
The module places great emphasis on theoretical ideas and tools derived from industrial organization, transaction cost theory, game theory, contract theory, and behavioural economics. The module makes an extensive use of real-world business examples to illustrate how to use economic theory in the analysis of markets and in business decision-making. Also, to illustrate important economic concepts, the module uses graphs and calculations based on actual markets and real data.
The main topics covered during the module are:
- Pricing and price discrimination
- Oligopoly: price and quantity competition
- Entry and market structure
- Mergers and merger policy
- Market foreclosure
- Vertical relations
- Product differentiation and advertising
KNOWLEDGE AND UNDERSTANDING: knowledge and understanding of the main hypothesis, methods and results of industrail economics
APPLYING KNOWLEDGE AND UNDERSTANDING: ability to use the methods of industrial organisation to analyse markets
MAKING JUDGEMENTS: ability to evalutate the robustness of economic arguments in the light of the robustness of the underlying modeling choices
COMMUNICATION SKILLS: ability to illustrate the hypothesis, methods and results of industraill economics; ability to illustrate how the methods of industriail economics may be used to analyse markets
LEARNING SKILLS: ability to read, comprehend and evaluate advanced industrial economics manuals and papers
The module is based on the following textbook:
- Cabral, L. 2017. Introduction to Industrial organization (2nd edition). MIT press.
(chapter covered: 2 (sections 2.1 and 2.2 only), 3 (sections 3.1, 3.2 and 3.3 only), 4, 6, 8, 9, 10, 11, 12 13, 14)
Lecture slides will be posted on the course website after the relevant lecture.
The final exam is writen only, with exercises and essay-type questions. Homework accounts for 10% of the final grade, only if contributing positively to the final grade.
Students are allows to sit one exam only in each exam session. Students are allowed to withdraw during an exam; a withdrawn students will be allowed to resit the exam in the next exam session only.