5172 - INDUSTRIAL ORGANISATION

Industrial organization is the study of industry and firm behavior. Using the basic tools of microeconomic theory and game theory, this course will focus on the analysis of imperfectly competitive markets (monopoly and oligopoly). We shall first explore the relationships among firms in an industry by examining the nature of strategic interaction among them. We shall then analyze 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 examine the outcomes they produce. The last part of the course will deal with 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 standardization. During the lectures we shall discuss some examples (often drawn from the antitrust literature) of how economic concepts have been used in real world business and legal settings. 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 organization
• Monopoly and price discrimination
• Price competition and the Bertrand model
• Quantity competition and the Cournot model
• Tacit collusion
• Product differentiation
• 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

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

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Written exam.