Aggiornato A.A. 2020-2021
LECTURER
Prof. Elisabetta Iossa
Elisabetta.Iossa@uniroma2.it
Office hours: to be agreed by email
Elisabetta Iossa is Professor of Economics at the University of Rome ‘Tor Vergata’, Director of the Research Center in Procurement and Supply Chain, Proxenter (www.proxenter.it) and Research Fellow of the Center for Economic Policy Research (CEPR) in London, and IEFE-Bocconi. She studied in Napoli, University of York and Universitè Libre de Bruxelles, and worked in London at Brunel University for ten years. Her main research interests are in the provision of public services, public procurement and public-private partnerships. she has advised many international institutions such as Competition Commission, Financial Service Authority, Office of Fair Trading, International Fund for Agricultural Development and World Bank. Her main publications and further details are available on https://sites.google.com/site/profelisabettaiossa/
PROGRAM
This course aims at providing a theoretical and practical understanding of main issues in industrial organization and competition policy. Using basic concepts in game theory, the course studies the strategic interaction among firms in imperfectly competitive markets, the sources of market power, and rationale and impact of competition policy. Lectures will make use of analytical tools; practical examples will be provided throughout. A number of case studies are discussed.
LEARNING OUTCOMES
At the end of the Course student should:
At the end of the Course students should be able to understand and apply the logical approach of game theory to :
- Study collusive practices among firms in static and dynamic contexts
- Understand the firms' strategies to deter entry
- Discuss anticompetitive practices in oligopolies and the role of competition policy
- Discuss the rationale of different arguments on the effects on competition of firms’ practices
- Prepare presentations to discuss the effect of mergers and collusive deals
LECTURES
Part I. Getting started
Chp 1. What is 'Markets and Strategies'?
Chp 2. Firms, consumers and the market
Chp 3: 3.1.1: Standard Bertrand Model: review
3.2.1 Cournot Competition: review
3.4 Strategic substitutes vs strategic complements
Chp: 4:4.1: Stackelberg model: review
Reading: Chp. 1,2. Chp. 3.1.1; 3.2.1;3.4; ;4.1.1
Part III. Sources of Market Power
Chp 5. Product differentiation
Horizontal product differentiation
5.2.1 A simple location model
5.2.2 The linear Hotelling model
5.2.3. The Quadratic Hotelling Model
5.3.1. Vertical product differentiation
Reading: Chp. 5.1.; 5-2-1; 5.2.3. 5.3.1.
Part VI. Theory of Competition Policy:
Chp 14. Cartels and tacit collusion:
- 14. 2: Sustainability of Tacit Collusion
14.2.3 Collusion and multimarket contact
14.3: Detecting and fighting collusion: leniency programs
Reading: Chp. 14.2; 14.2.1; 14.2.2; 14.2.4 (simplified; see slides); 14.2.5 (simplified; see slides); 14.3.1; 14.3.2 (only leniency programs/no maths)
Chp 15. Horizontal mergers
15.1 Profitability of simple Cournot Mergers
15.1.2: Mergers between several firms
15.1.3: Efficiency increasing mergers
15.2: Welfare Analysis of Cournot mergers
Reading: Chp. 15.1.1; 15.1.2; 15.1.3 (no maths); 15.2 (no maths)
Chp 16. Strategic incumbents and entry
Chp 16.3 Strategies Affecting Demand variables:
Brand Proliferation
Bundling
16.4 Limit Pricing under Complete information
Limit Pricing under Incomplete information
Reading: Chp. 16.3.; 16.3.1, 16.3.2; 16.4
Group Presentations: Cartels, Mergers, Abuse of dominant position
Revision lecture
Testimonial: Sara Del Vecchio : a merger case
Tutorials/Seminars: Sara Mancini: numerical exercises
Additional Reading
Appendix A. Game theory
Appendix B. Competition policy
ESSENTIAL READING
All above indicated Chapters in Main Textbook
- Belleflamme, Paul and Martin Peits, (2015) Universität Mannheim, Germany Industrial Organization Markets and Strategies, 2nd Edition Cambridge University Press
ADDITIONAL READING FOR VERY INTERESTED STUDENTS
- Motta Massimo (2014), Competition Policy: Theory and Practice, Cambridge University Press.
Book website: all slides and exercises here.
https://www.cambridge.org/it/academic/subjects/economics/industrial-economics/industrial-organization-markets-and-strategies-2nd-edition?format=PB#resources
Prof.ssa Lucia Leonelli
