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Learning Objectives

LEARNING OUTCOMES: the aim of this course is to introduce students to strategic reasoning through a formal training in game theory and a parallel set of lectures on applications to competition policy. Specifically, we will formally introduce the basic ingredients of non cooperative games and a number of equilibrium concepts used to solve them. These will be applied to studying strategic interaction among firms and to design incentive schemes to achieve a number of basic public policy goals.

At the end of the Course students should be able to understand and apply the logical approach of game theory to analyse the strategic environment that firms face in regime of oligopoly. In particular, we will study anti-competitive conducts put forth by firms and public policies to address them.

At the end of the Course students should be able to apply the knowledge to identify potential anti-competitive practices.

Given a firm's conduct, the student should be able to (i) sketch its overall impact on economic surplus and its redistributive impact on the individual surplus of the parties involved and (ii) suggest potential interventions.

At the end of the course students should be able to analyse market practices and prepare presentations to discuss their effects on competition.


Game Theory (first part of the course)


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.


Chp 1. What is 'Markets and Strategies'?
Chp 2. Firms, consumers and the market
Chp 3: 3.1.1: Standard Bertrand Model
3.2.1 Cournot Competition
3.4 Strategic substitutes vs strategic complements
Chp: 4:4.1: Stackelberg model

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


Group Presentations: European commission cartel cases

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 Week 5 (6hrs)
Chp 16.3 Strategies Affecting Demand variables:
Brand Proliferation
16.4 Limit Pricing under Complete information
Limit Pricing under Incomplete information

Reading: Chp. 16.3.; 16.3.1, 16.3.2; 16.4

Revision lecture



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


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

Teaching methods

The course comprises lectures and seminars.

Exam Rules

The exam is written and it lasts 1.5 hours. It is potentially composed of different sections.
The first section is theoretical: the candidate is required to answer concisely questions on the course material with short essays. The second will test the candidate's knowledge of formal models of competition using the language of mathematics by either asking to present and discuss them or asking to solve exercises.