The course in Industrial Economics analyzes firms and markets behaviour by using microeconomics and game theory tools. In particular, the strategic interaction between competitors, consumers and the regulator will be explored. Each lecture will be motivated by the exposition of a relevant business case, as in the tradition of Economics departments of the major Business Schools. Students aiming at managerial or consultant positions will be provided with the main theoretical tools recently developed in Industrial Economics literature, enriched with examples, applications and the analysis of public policies regulating business and competition, such as patent and antitrust laws. The main objective of the 72 hours of lectures is to provide students with two main skills:
1) the knowledge of the most recent and rigourous theories explaining the behavior of firms (in terms of strategy, marketing and organization) and the effects of regulation policies. 2) The ability to understand and process the relevant economic information relating to markets, competition and regulation policies.
The course covers the following topics:
- Basic concepts of microeconomics: Market structure and market power, technology, production costs, factor demand and profit maximization. The dual problem.
- The monopoly: price discrimination, linear and non-linear pricing, product differentiation
- Strategic interaction between firms: Game Theory and Cournot competition, price competition (Bertrand); dynamic games, backward induction and subgame perfect equilibria.
- Anticompetitive strategies: price limits and barriers to entry; predatory behavior; pricing and repeated games. Collusion and antitrust laws.
- The horizontal mergers and vertical restraints.
- Competition, advertising and market power.
- Competition and dynamic efficiency.
- Research and development and patents.
- Networks: the model of Rohlfs (i.e. why Facebook is successful).
Organizzazione industriale 2/ed (2013): Lynne Pepall, Daniel J. Richards, George Norman e Giacomo Calzolari. Mac Graw-Hill, MISBN: 9788838667831.
The assessment of competences acquired by the students will be based on a written exam consisting in of 3 exercises and open questions, possibly inspired by issues extracted from business newspapers. An intermediate test (optional) will be available in November and will be organized in the same way. Students who pass the partial test can complete their examination on the residual topics only during the winter session.
The final grade will be determined at 50% from the first test, 50% by the second one.
Full information about the contents of the course, the final examination and further material will be available on the e-learning website. This tool will constitute a valuable support for students attending the course, also providing full access to the course contents for non-attending students.