Facoltà di Economia

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.
Course program by topic:
Week 1:
What are markets, market power and strategies?
Firms, consumers and the market
Theory of a monopoly

Week 2:
Standard Bertrand Model
Cournot Competition
Stackelberg model

Week 3
Theory of Competition Policy
Cartels and tacit collusion
Sustainability of Tacit Collusion
Collusion and multimarket contact
Detecting and fighting collusion: leniency programs

Week 4
Product differentiation
Horizontal product differentiation
A simple Hotelling location model
Vertical product differentiation

Week 5
Mergers and vertical supply chains
Horizontal mergers
Vertical relations

Week 6
Strategic incumbents and entry
Brand Proliferation
Bundling
Predatory pricing
Other forms of entry deterrence

The main material for the course are slides provided on Microsoft Teams in the course Team

Additionally, weekly tutorials a provided to help with the problem sets and learning the material.

The textbook for the course is: Cabral Luis M. B. (2017). Introduction to Industrial Organization, 2nd Edition, MIT
Press, Cambridge, MA.

Additional material can be found from:

 Belleflamme, Paul and Martin Peitz, (2015). Industrial
Organization Markets and Strategies, 2nd Edition, Cambridge University Press.

Motta Massimo (2014), Competition Policy: Theory and Practice, Cambridge University
Press.