Bachelor 2019/2020

Industrial Organization Theory

Type: Compulsory course (Economics)

Area of studies: Economics

Delivered by: School of Economics and Finance

Where: Faculty of Economics, Management, and Business Informatics

When: 3 year, 1, 2 module

Mode of studies: offline

Instructors: Anastasiya Redkina

Language: English

ECTS credits: 5

Contact hours: 76

Course Syllabus

Abstract

The course introduces the theory of industrial organization and focuses on behavior of firms, market structures, interaction between them, and antitrust policy. It includes economic modeling, game theory, case studies, and discussion of real life examples. The course focus is split between economy theory models and real markets analysis. Knowledge acquired in this course will provide students with analytical, business managing, and public governance skills.

Learning Objectives

• The goal of the course is to prepare students for managerial, analytical, entrepreneurial, and research activities and duties in the course of employment at entry level and junior executive positions and continuation of their education in postgraduate programs.

Expected Learning Outcomes

• Capable to conduct research activities, including market competition analysis; Capable to work in a team.
• Understand relevant economic theory (concepts and models), capable solve problems on this topic.
• Capable to work in a team. Capable to conduct research activities, including market barriers estimation.

Course Contents

• Market Power and Market Structure
  1.1. Introduction to IO: The NEIO and SCP. Review of microeconomic knowledge about markets and firm behavior. 1.2. Market Power. 1.3. Concentration Measure. 1.4. Market Definition. 1.5. Analytical project. Part 1.
• Monopoly and Price Discrimination
  2.1. Review of Monopoly. 2.2. Durable Goods Monopoly. 2.3. Price Discrimination. 2.4. A Dominant Firm with a Competitive Fringe.
• Oligopoly
  3.1. Static Oligopoly Models. 3.2. Dynamic oligopoly. 3.3. Collusion.
• Market Entry
  4.1. Entry Barriers. 4.2. Entry Deterrence. Introduction to Entry Games. 4.2.1. Analytical project. Part 2.
• Vertical Integration and Vertical Restraints
  5.1. Incentives for Vertical Merger. 5.2. Vertical Restraints.

Assessment Elements

• Homework
  Homework (rating grade). Three themes of the course end with a student group project (3-4 students), which includes written part, oral presentation, and individual questions. For this assignment, students receive clear instructions and the list of requirements.
• Classroom Test
• Seminar work
• Self-study work
• Exam

Interim Assessment

• Interim assessment (2 module)
  0.2 * Classroom Test + 0.3 * Exam + 0.2 * Homework + 0.15 * Self-study work + 0.15 * Seminar work

Bibliography

Recommended Core Bibliography

• Tirole, J. (1988). The Theory of Industrial Organization. Cambridge, Mass: The MIT Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=nlebk&AN=11386

Recommended Additional Bibliography

• Bresnahan, T. F., & Reiss, P. C. (1991). Entry and competition in concentrated markets. Journal of Political Economy, 99(5), 977. https://doi.org/10.1086/261786
• Michael D. Whinston. (2001). Exclusivity and Tying in U.S. v. Microsoft: What We Know, and Don’t Know. Journal of Economic Perspectives, (2), 63. https://doi.org/10.1257/jep.15.2.63