Бакалавриат
2020/2021
Отраслевые рынки
Лучший по критерию «Новизна полученных знаний»
Статус:
Курс по выбору (Экономика)
Направление:
38.03.01. Экономика
Кто читает:
Департамент прикладной экономики
Где читается:
Факультет экономических наук
Когда читается:
3-й курс, 1, 2 модуль
Формат изучения:
без онлайн-курса
Преподаватели:
Казакова Екатерина Александровна
Язык:
английский
Кредиты:
5
Контактные часы:
60
Course Syllabus
Abstract
The course introduces the theory of industrial organization (IO) which focuses on the business behavior of firms, its implications for industry structures, and policies of industry regulation. More broadly, we look at the imperfect competition and strategic interactions of firms in different sectors and explain differences across industries. Among possible strategies, we will discuss pricing and production strategies; competition in innovations and cooperation in R&D; informative and persuasive advertising strategies; various anticompetitive practices: collusion, retail price maintenance, price discrimination, tying, exclusive clauses, predatory behavior and entry deterrence. You will become familiar with the main (static and dynamic) models of monopoly and oligopoly, horizontal and vertical product differentiation, models of asymmetric information. Moreover, we will analyze the industry structure and performance. You will study how to measure the market concentration and relate it to the level of competition. Particular emphasis will be given on the determinants and consequences of vertical and horizontal mergers. Throughout the course, we will always discuss possible ways of market regulation and related antitrust policies.
Learning Objectives
- You will become familiar with the most important models of the industrial organization for understanding strategies chosen by firms to acquire and maintain market power.
- This course improves your (micro-)economic reasoning and modeling skills, which, in particular, can be useful for writing your term papers and Bachelor theses involving analysis at the firm or industry level.
Expected Learning Outcomes
- Understanding of the basic questions asked in IO. Learning the history of IO.
- Review of perfect competition, a good understanding of the basics.
- Review of the basics of game theory. Ability to find NE, SPNE and PBNE.
- Ability to model pricing decisions and distinguish different types of price discrimination.
- Understanding of differences of quantity and price competition, very good understanding of the basic homogenous good models.
- Learning the basics of collusion, incentives to collude and sustainability of collusion.
- Good understanding of the Hotelling model and differences between address and non-address approached to differentiation modeling.
- Ability to model advertising choices. Understanding of consequences of advertising.
- Learning the basics of R&D decisions and regulation of patents.
- Learning different ways to signal quality and understanding of distortions that come with uncertainty. Understanding of the basics of consumer search.
- Understanding of the consequences of the presence of network effects, the ability to apply this knowledge to the modeling of markets with network effects.
- Learning different techniques to reach vertical integration outcomes without vertical integration.
- Learning of the basics of merger analysis.
- Understanding of the entry deterrence and entry accommodation strategies and their implication for the market equilibrium outcomes. Understanding how to define the market and measure concentration.
- General knowledge about antitrust and competition policy.
Course Contents
- IntroductionIntroduction to IO. History of IO. Main questions studied in IO.
- Review of perfect competition and monopolyModeling demand and supply sides in a perfectly competitive environment. General equilibrium. Monopoly: baseline model and dominant firm. Natural monopoly.
- Review of game theoryReview of the basic tools in the game theory that are applied in IO. Static and dynamic games.
- Static oligopolyCournot and Bertrand models for homogenous good markets.
- Dynamic oligopoly and collusionCollusion. Punishment schemes.
- Pricing strategiesPrice discrimination, non-linear pricing, intertemporal discrimination.
- Product differentiationNon-address (goods) approach: Cournot and Bertrand models with differentiated products. Monopolistic competition. Address (location) approach: Hotelling and Salop models. Characteristics approach.
- AdvertisingInformative and persuasive advertising in monopoly. Informative and persuasive advertising in oligopoly.
- Patents and R&DMajor and minor innovations. Innovation and market structure. R&D spillovers, cooperation in R&D and joint ventures. Patents.
- Imperfect informationAkerlof model. Signaling about quality with reputation, advertisement, price, warranties. Consumer search.
- Network effectsDirect and indirect network effects. Competition in a network goods market. Regulation of a network goods market.
- Vertical relationsDouble marginalization. Revenue sharing. RPM. Exclusive dealership and exclusive territories. Chicago critic.
- MergersSimple Cournot horizontal mergers. Extensions: the merger of several firms, scale economies/capacity constraints, synergies, successive mergers, entry, Bertrand competition, product differentiation, coordinated effects. Welfare analysis of mergers.
- Entry and market structureMarket definition. Concentration indices. Entry and related strategies. Entry deterrence and entry accommodation. Bain-Sylos postulate. Judo economics. Brand prefiltration.
- AntitrustHistory of antitrust. Detecting collusion. Indistinguishability theorem. Leniency programs. Review of market regulation discussed in the previous lectures.
Assessment Elements
- QuizEvery week, there will be a short online quiz which is aimed to test understanding of the basic concepts discussed in the previous lecture
- HomeworksThe content of homework assignments will be mainly problem-solving. There are 5 small homework assignments.
- Group presentation20-minutes presentation of one theoretical or empirical IO paper during the seminar.
- EssayEssay on the same paper as presented in the class.
- ExamThe final written exam consists of three parts: 20 true/false questions, 3 open questions related to the practical application of IO for industry analysis, and 2 theory problems. The exam will be held in a distant format
Interim Assessment
- Interim assessment (2 module)0.15 * Essay + 0.4 * Exam + 0.1 * Group presentation + 0.25 * Homeworks + 0.1 * Quiz
Bibliography
Recommended Core Bibliography
- Belleflamme, P., & Peitz, M. (2010). Industrial Organization : Markets and Strategies. Cambridge, UK: Cambridge eText. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=324082
- Oz Shy. (1996). Industrial Organization: Theory and Applications. The MIT Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.mtp.titles.0262691795
Recommended Additional Bibliography
- Industrial organization : a strategic approach, Church, J., 2000
- Microeconomic theory, Mas-Colell, A., 1995