5172 - INDUSTRIAL ORGANISATION

Industrial organisation is the study of industry and firm behaviour. Using the basic tools of microeconomic theory and game theory, this course focuses on the analysis of imperfectly competitive markets (monopoly and oligopoly). The first part of the course explores the relationships among firms in an industry by examining the nature of strategic interaction among them and then analyses the strategies and methods that the firms use to preserve their monopolistic positions (deterring entry into an industry or driving rivals out of an industry), and examines the outcomes they produce. The last part of the course deals with the dynamic aspects of competition that represent critical issues in high technology and information technology industries: innovation and persistence of market dominance, network externalities and strategies in standardisation. During lectures some examples (often drawn from the antitrust literature) of how economic concepts have been used in real world business and legal settings are discussed. The aim of this is to help students to develop a working knowledge of market structures and firms' strategies.

• Introduction to the analysis of industrial organisation
• Monopoly and price discrimination
• Price competition and the Bertrand model
• Quantity competition and the Cournot model
• Tacit collusion
• Product differentiation
• Mergers
• Advertising and market structure
• Entry costs and long run equilibria
• Strategic entry deterrence
• Predatory pricing
• Vertical relations
• Research and Development and innovation
• Networks and standards

Written exam.

• L. CABRAL, Introduction to Industrial Organization, Cambridge, MIT Press, 2000

For further and continuously updated information consult the IEP web site or contact SID - Servizio Informazione Didattica - Institute of Economics - via Gobbi, 5 - Room 313.