Teaching code

4S00509

Credits

9

Coordinator

Language

Italian

Scientific Disciplinary Sector (SSD)

SECS-P/01 - ECONOMICS

Moodle Seminars 0

The teaching is organized as follows:

Learning outcomes

The main purpose of the course in Industrial Economics is the economic analysis of the interaction between firms and consumers in the market, in order to assess whether or not there may be scope for policy intervention to improve overall welfare. In particular the relationships between competitors, suppliers, customers, consumers, and the regulator, are taken into consideration, in reference to real business cases. The main objective is to train students to critically read and evaluate these economic issues as well as the relevant industrial policies. The course investigates firms’ choices using the tools of microeconomics and game theory. It therefore involves an analytical approach to industrial organization, with a specific focus on strategic interaction.
Game theory, introduced by means of examples and case studies, explains how, when in the presence of a limited number of agents, each of them makes his or her moves taking into account of the strategies of the other agents. The use of this theory in Industrial Economics - that could be defined alternatively as “the economics of imperfect competition” - may also be useful for solving problems in other fields, such as strategy, marketing, finance, organization. This is a course in applied microeconomics designed for students interested in the functioning of firms and markets and who will then pursue managerial or consultancy positions. The discussion will therefore be motivated and accompanied by the study of business cases, as well as economic policies involving specific industries or sectors, as in the tradition of Economics departments of major Business Schools.

Program

The course program includes the following topics:
- Basic concepts: the basics of microeconomics, market structure and market power, technology and production costs.
- The monopoly power in theory and practice: price discrimination and monopoly; linear and nonlinear prices; variety and product quality in monopoly.
- Oligopoly and strategic interactions: Static Games and Cournot competition; price competition (Bertrand); dynamic games; first and second mover advantage.
- Anticompetitive strategies: limit-pricing and entry deterrence; predatory pricing, recent developments; price-fixing and repeated games; collusion: how to identify and defeat it.
- Contractual relations between firms: horizontal mergers, vertical restraints.
- Non-pricing competition: advertising, market power, competition and information; research & development and patents.
- Networks: network issues.

Bibliography

Examination Methods

Consistently with the course content, the final exam includes a written examination in which the student is asked a) to solve analytically two or three exercises, b) to answer 10 to 15 multiple choice questions on theory, and c) to answer one or two question related to economic news, that is to critically comment current events related to the economic topics of the course.
Finally, students are required to prepare a case study on a topic of choice, developing an essay of about 1,000 words which must be handed in on the day of the examination. Case studies can be carried out in groups ranging from 4 to 6 students. By the end of October, each group is required to communicate to me via email the names of the students that are part of the group. Each student must be part of one and only one group.
During the course students will also have the possibility to participate in a business strategy simulation game. This is optional and allows students to earn bonus points for the final grade.

The final grade for the course includes an exam grade, plus a bonus for the case study, plus a bonus for the business strategy game (for those who participate.

Starting from 2013-14 students will have the choice to take a partial exam (written) including all the program covered up to that point. The partial exam is non-compulsory, and conditional on passing allows students to take the second (and final) partial exam that covers exclusively the second part of the course, and will take place only in the exam session that immediately follows the end of the course (January/February). In order to pass the exam those that decide to take the partials must pass both, and the final exam grade will be computed as an average of the two.

The general exam will instead cover the full program of the course. More information about the course contents, the exam and additional materials can be found on the course’s e-learning webpage.