Industrial Economics

Recommended Prerequisites

Not applicable.

Teaching Methods

The theoretical approach is used for the development of the main models of the program and the practical approach applies the referred models. 

Learning Outcomes

Further study of market functioning mechanisms and strategic interaction between firms and consequences in terms of welfare and market power.

At the end of this course, the student should be able to:

(i)     Identify different classic oligopoly equilibrium with and without product differentiation.

(ii)   Understand the nature of the absence of coincidence between free entry equilibrium number of firms and the socially optimum number of firms and its consequences in terms of economic regulation.

(iii) Understand firms’ different strategies for deterring entry and its consequences in terms of competition policy.

(iv) Relate the dynamic theory of oligopoly with the sustainability of tacit collusion in different competitive contexts.

(v)   Find the way how market outcomes in differentiated product markets compare with socially desirable outcomes.

Work Placement(s)

No

Syllabus

1. Oligopoly theory;

2. Strategic behavior: investment in entry deterrence;

3. Tacit collusion (dynamic oligopoly theory);

4. Identifying and measuring market power;

5. Product differentiation.   

Head Lecturer(s)

Adelino Manuel Guimarães Fortunato

Assessment Methods

Assessment
Periodic or by final exam as given in the course information: 100.0%

Bibliography

BELLEFLAMME, Paul ; PEITZ, Marin – Industrial organization : markets and strategies. Cambridge : Cambridge University Press, 2010.
CHURCH, Jeffrey ; WARE, Roger — Industrial organization : a strategic approach. Boston : Irwin/McGraw- Hill, 2000.
MARTIN, Stephen — Advanced industrial economics. 2nd ed.. Malden : Blackwell Publishers, 2002.
PEPALL, Lynne ; RICHARDS, Daniel J. ; NORMAN, George — Industrial organization : contemporary theory and empirical applications. 5th ed.. Hoboken : John Wiley & Sons, 2014.
SHY, Oz — Industrial organization : theory and applications. Cambridge, Mass. : MIT Press, 1996.
TIROLE, Jean — The theory of industrial organization. Cambridge, Mass. : MIT Press, 1994.