Industrial Organization

Recommended Prerequisites

Not applicable.

Teaching Methods

The lectures are organized to encourage students’ active involvement in learning, fostering student-teacher and student-student interaction.
In the theoretical classes, contents and models are presented with analytical rigor, stimulating the students' intuition and discussion. In others classes, theoretical knowledge is applied to discuss and analyse (real and/or simulated) problems, hence contributing to the course objectives’ achievement.
Tutorial guidance is also available to students, in order to seek clarification,explanations, guidance for the essay or to debate a specific theme

Learning Outcomes

The objective of this intermediate course is to extend students’ knowledge about firm behaviour and the functioning of imperfectly
competitive markets, exposing them to some of the most widespread topics and models considered in Industrial Organization.
At the end of the course, the student should be able to:
i) Understand the problems faced by a monopolist in terms of pricing and price discrimination.
ii) Identify different classic oligopoly equilibrium with and without product differentiation.
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.
vi) Understand firms’ different strategies for deterring entry and its consequences in terms of competition policy.

Work Placement(s)

No

Syllabus

I – Foundations
1 Industrial organization and imperfect competition
2 Technology and cost
3 Market power and welfare
II – Price Discrimination and Monopoly
1 Price discrimination
2 Two-part tariffs
3 Non-linear pricing
4 Bundling and tying
III – Oligopoly Pricing
1 A brief introduction to Game Theory
2 Static Oligopoly models
3 Dynamic models of Oligopoly
4 Product differentiation
IV – Strategic Behaviour
1 Entry deterrence
2 Investment in capacity

Head Lecturer(s)

Carlos Manuel Gonçalves Carreira

Assessment Methods

Assessment
Resolution Problems: 15.0%
Synthesis work: 15.0%
Exam: 35.0%
Frequency: 35.0%

Bibliography

BELLEFLAMME, Paul; PEITZ, Marin – Industrial Organization: Markets and Strategies, 2nd ed. Cambridge University Press, 2015.
CHURCH, Jeffrey ; WARE, Roger — Industrial Organization: A Strategic Approach. Boston: Irwin/McGraw- Hill, 2000.
MARTIN, Stephen — Advanced Industrial conomics. 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.
TIROLE, Jean — The Theory of Industrial Organization. Cambridge, Mass: MIT Press, 1988.