Industrial Economics and Policy
Program (6 CFU):
The program will first recap some basic concepts in Industrial Economics and then provide some in depth discussion about market efficiency, price discrimination, product differentiation and firms' strategic behaviors in a game theory perspective.
Textbook: Church, Jeffrey R and Ware, Roger (2000): “Industrial organization: a strategic approach”, Irwin McGraw Hill Boston. ISBN: 978-0071166454
(online version freely downloadable)
https://edisciplinas.usp.br/pluginfile.php/544042/mod_resource/content/1/ChurchWare.pdf
Additional readings may be given during classes.
The main topics that are going to be covered are:
1. The welfare economics of market power (profit maximization, perfect competition, efficiency, market power, market power and public policy)
2. Theory of the Firm (neoclassical theory of the firm, market power and dominant firms, sources of market power, durable goods monopoly, benefits of monopoly)
3. Non-linear pricing and price discrimination (mechanisms for capturing surplus, market power and arbitrage, types of price discrimination, antitrust treatment of price discrimination)
4. Game theory (foundations and principles, static games of complete information, classic models of oligopoly (static), Cournot vs. Bertrand)
5. Game theory II (extensive forms, strategies vs. actions and Nash equilibria, noncredible threats, two-stage games)
6. Product differentiation (monopolistic competition, strategic behavior)
7. Strategic behavior (the Stackelberg game)
8. Entry deterrence (the role of investment in entry deterrence, entry barriers)
Point by point program (Church and Ware book)
Important note: if not otherwise specified, case studies and examples throughout the book (there are many and inflate the page numbering) are not part of the program on which you are going to be directly tested. Their reading may however help you understanding some concepts.
Ch. 1 (All)
Ch. 2 (2.1, 2.2, 2.2.1, 2.2.2, 2.3, 2.3.1, 2.3.2, 2.4, 2.4.1, 2.4.2)
Ch. 3 (3.1, 3.1.1, 3.1.2, 3.1.3)
Ch. 4 (4.1, 4.1.1, 4.1.2, 4.1.3, 4.2, 4.2.1, 4.3, 4.3.1, 4.4, 4.4.1, 4.4.2, 4.5, 4.5.1, 4.5.2)
Ch. 5 (5.1, 5.2, 5.3, 5.4, 5.4.1, 5.4.2, 5.4.3)
Ch. 7 (7.1, 7.2, 7.2.1, 7.2.2, 7.2.3, 7.2.4, 7.3, 7.3.1, 7.3.2, 7.3.3, 7.3.4, 7.3.5 (up to page 222), 7.3.6)
Ch. 8 (8.1, 8.2, 8.2.1, Exercise 8.1, 8.2.2, 8.2.3, 8.2.4 (up to page 250), 8.3, 8.3.1, 8.3.2, 8.3.3 (only introduction), 8.4)
Ch. 9 (9.1, 9.2, 9.3, 9.3.1, 9.4, 9.5, 9.5.1, 9.5.2 (up to page 296))
Ch. 10 (10.1, 10.1.1, 10.1.2, 10.1.3, 10.2, 10.3, 10.3.1, 10.4, 10.4.1, 10.5 (only streamlined, no detail))
Ch. 13 (13.1, 13.1.1, 13.2, 13.2.1, Exercise 13.1, 13.3, 13.3.1, 13.3.2, 13.4, 13.4.1, 13.4.2)
Ch. 14 (14.2)
Evaluation:
Starting from June 2021, all exams are no longer online. The examination will be exclusively based on a written examination composed of theoretical questions and exercises modeled after the problem sets.
Lectures:
Monday and Tuesday 14:00-16:00 Aula Acquario
Meeting with students:
Tuesday 16:00
Additional material:
Next exams:
Check on Infostud