2020/2021

2020/2021

DM270

SECS-P/03 (FINANCE)

DEPARTMENT OF ECONOMICS AND MANAGEMENT

ECONOMICS, FINANCE AND INTERNATIONAL INTEGRATION

Industrial Organization and Market Regulation

1°

1st semester (28/09/2020 - 22/12/2020)

6

44 lesson hours

English

WRITTEN AND ORAL TEST

CAVALIERE ALBERTO (titolare) - 4 ECTS
CALDANA MARTINA - 2 ECTS

This course requires a good knowledge of Microeconomics at an undergraduate level. In particular students should be familiar with the theory of market structures. Students are expected to know the theory of perfect competition, while the theory of monopoly will be reviewed at the start of the course. Elementary notions of game theory are also a pre-requisite. However some tutorials will be organized in order to fill the gaps in game theory with applications to oligopoly.

This course aims to provide students with analytical skills useful to understand the economic foundations of antitrust policies and public utilities regulation. At the end of the course students should be able to distinguish ex-post and ex-ante regulation, to understand the methodology of antitrust investigations and to evaluate the necessity of price regulation in network industries (making judgements). Moreover students will be able to understand texts related to competition policy cases and are expected to develop a critical view about regulation decisions ant their effects on firms and consumers (applying knowledge and understanding). As students will be also involved in project works to be presented in class they will also develop communication skills.

Market Power and Welfare: allocative efficiency, productive efficiency, dynamic efficiency
Market definition and Assessment of Market Power
Collusion: Theory and Practice
Vertical Restraints and Vertical Mergers
Predatory Pricing and other Abusive Practices
Network Industries and the Theory of Natural Monopoly
Regulation with perfect information: Linear and Non-linear tariffs
Regulation with asymmetric information: Cost-plus and Fix-price Mechanisms

The course includes traditional lectures by the instructor, a few tutorials and project works done by students and presented to the class. Traditional lectures include both power point presentations and use of the blackboard by the instructor, especially when dealing with analytical topics. Traditional lectures and excercises are aimed to allow students to achieve analytical and methodological skills. Project works done by students under the supervision of the instructor will help students to understand what an antitrust case really is and then learn to link theory with practice. Actually students work with texts related to investigations made by the European Competition Policy Commission (available in the website), and cases cover different type of industries. By working on a single case and listening to presentations related to other cases students will gradually improve their critical assessment of antitrust intervention.

M Motta (2004), Competition Policy. Theory and Practice, Cambridge University Press; P. Joskow (2007), The Regulation of Natural Monopoly, in: A.M. Polinsky and S. Shavell (Editors) Handbook of Law and Economics, Elsevier, also available at http://18.7.29.232/bitstream/handle/1721.1/45038/2005-008.pdf

The final grade is based on a written exam (60%) and on the presentation in class of a competition policy case (40%). The written exam is composed by open questions, excercises and a few multiple choice questions. The written exam is useful to test if students have been able to achieve the analytical and metholological skills required by the course. The presentation in class of a competition policy case is useful to test if students can understand the main issues related to the case and use a proper economic language to present them.

Considering that the Course requires a good knowledge of basic microeconomics, Erasmus students are kindly asked to verifiy if they are ready to attend the Course.