MARKET STRUCTURE AND COMPETITION POLICY
The course will deal with the modern theory of industrial organization and competition policy. A part of the course will also explore the structure of the Italian economy and roots of its relative decline.
The course’s objective is twofold. First, making use of basic game theory tools, we aim to provide a detailed introduction to the main theoretical models that constitute the modern approach to industrial organization. These models will then be used in order to introduce students to the main issues of modern competition policy. Second, the course aims to provide students with some theoretical and empirical tools that can be used to study the current weaknesses of the Italian economy.
AIMS AND LEARNING OUTCOMES
The first part of the course aims to introduce the economic theory and game theory tools that will allow students to understand and critically apply to real world situations the main models used in industrial organization and competition policy. Students will be able to study and critically evaluate the decision of antitrust agencies. The aim of the second part of the course is to euip students with the theoretical and empirical tools that are key to understand and evaluate the structure of the Italian economy and the roots of its relative decline. Students will learn to critically evaluate reports on the Italian economy by Italian and international isntitutions.
Basic knowledge of microeconomics
In the first part of the course the following topics will be covered: monopoly pricing & price discrimination, market definition in antitrust investigation, oligopoly theory (Cournot, Bertrand with homogenous and differentiated prices, with or without capacity constraints; Stackelberg and Bertrand in dynamic games, oligopoly models and market structure), models of industry dynamics, models of entry deterrence and predatory pricing, mergers and acquisitions, collusion and cartels (finite and infinite games; trigger strategies, sector characteristics that facilitate collusion, natural monopoloies and economic regulation.
In the second part of the course (roughly one fourth of the course) the following topics will be covered: competitiveness and productivity indices (labour productivity, total factor productivity, unit labour costs, effective exchange rates); sectorial specialization of the Italian economy; the size problem of Italian firms; human capital; innovation; main theories of Italian relative economic decline.
Pepall, Richards, Norma, Industrial Organization: Contemporary Theory and Empirical Applications. fifth edition, Blackwell Publishing, 2013.
Pepall, Richards, Norman, Calzolari, Organizzazione Industriale, McGraw Hill, III edizione, 2017.
MAURIZIO CONTI (President)
The exame, through a combination o exercises and open questions, will aim to test the student understanding of the main concepts and her/his ability to apply models and tools to real world situations.