04OJAPH

A.A. 2020/21

Course Language

Inglese

Degree programme(s)

Master of science-level of the Bologna process in Ingegneria Gestionale (Engineering And Management) - Torino

Course structure

Teaching | Hours |
---|---|

Lezioni | 80 |

Lecturers

Teacher | Status | SSD | h.Les | h.Ex | h.Lab | h.Tut | Years teaching |
---|---|---|---|---|---|---|---|

Benfratello Luigi | Professore Associato | SECS-P/02 | 65 | 0 | 0 | 0 | 9 |

Co-lectuers

Context

SSD | CFU | Activities | Area context |
---|---|---|---|

ING-IND/35 SECS-P/02 |
4 4 |
B - Caratterizzanti F - Altre attività (art. 10) |
Ingegneria gestionale Altre conoscenze utili per l'inserimento nel mondo del lavoro |

2020/21

The purpose of this course is to provide students a framework to understand the strategic behaviour of firms and consumers acting in oligopolisitc markets where competition is imperfect. Policy reforms aiming at enforcing competition in markets (antitrust policy) and at regulating markets were competition is not present will also be illustrated. The course is structured in a theoretical part where market equilibrium, game theory and oligopoly theory will be developed. A second part dealing with econometric tools will allow students to understand and replicate applied works in Industrial Economics. Then, the theoretical and applied tools will be applied to specific markets and institutions.

The purpose of this course is to provide students a framework to understand the strategic behaviour of firms and consumers acting in oligopolisitc markets where competition is imperfect. Policy reforms aiming at enforcing competition in markets (antitrust policy) and at regulating markets were competition is not present will also be illustrated. The course is structured in a theoretical part where market equilibrium, game theory and oligopoly theory will be developed. A second part dealing with econometric tools will allow students to understand and replicate applied works in Industrial Economics. Then, the theoretical and applied tools will be applied to specific markets and institutions.

Students will learn the functioning of different market structures (competitive, oligopolisitc or monopolistic markets), firms' strategies and competitive issues. They will also understand the rationale for antitrust and regulation policies. They will also learn to understand and replicate on their own econometric analyses in Industrial Economics.

Students will learn the functioning of different market structures (competitive, oligopolisitc or monopolistic markets), firms' strategies and competitive issues. They will also understand the rationale for antitrust and regulation policies. They will also learn to understand and replicate on their own econometric analyses in Industrial Economics. These tools will prove to be extremely useful when students will work in firms or public institutions as they will enable them to interpet the behaviour of other agents in the market (firms, consumers, workers, public authorities) and, in turn, to elaborate proper strategies to follow.

This class requires a solid foundation in calculus and some knowledge of statistical inference. Moreover, the frequency to the “Economics” course is a pre-requisite.

This class requires a solid foundation in calculus and some knowledge of statistical inference. Moreover, the frequency to the “Economics” course is a pre-requisite.

The course is divided into three parts. The first section is devoted to a review of perfect competition and monopoly and to market failures. The second section is devoted to methodological tools necessary to understand theoretical models and applied analyses in industrial economics, namely game theory and econometrics. The last part deals with the theory and empirics of imperfect competition, with a special focus on con competition policy and regulation. In particular, the detailed syllabus is the following:
1. Introduction to welfare economics. Market failures: market power, externalities, public goods and asymmetric information. A focus on externalities: network economics.
2. Game theory. Static games with perfect information: Equilibrium concepts; Nash equilibrium; pure and mixed strategies; Nash theorem. Dynamic games with perfect information: the refinement of perfection; subgame perfection; backward induction; repeated games (finite and infinite time horizon); Folk’s theorem.
3. Econometrics. Linear regression with single regressors and with multiple regressors. Non linear (in variables) regression.
4. Oligopoly theory. Cournot and Bertrand models; SCP paradigm; concentration. Multiplant monopolist and collusion. Stackelberg model; entry.
5. Price discrimination: Pigou classification; third degree discrimination; two-part tariffs; quality, quantity and autoselection. Tying and bundling.
6. Differentiated products: Spence model; address models: horizontal and vertical differentiation with exogenous location.
7. Empirical analyses in Industrial Economics. Competition and regulation policies.

The course is divided into three parts. The first section is devoted to a review of perfect competition and monopoly and to market failures. The second section is devoted to methodological tools necessary to understand theoretical models and applied analyses in industrial economics, namely game theory and econometrics. The last part deals with the theory and empirics of imperfect competition, with a special focus on con competition policy and regulation. In particular, the detailed syllabus is the following:
1. Introduction to welfare economics. Market failures: market power, externalities, public goods and asymmetric information. A focus on externalities: network economics.
2. Game theory. Static games with perfect information: Equilibrium concepts; Nash equilibrium; pure and mixed strategies; Nash theorem. Dynamic games with perfect information: the refinement of perfection; subgame perfection; backward induction; repeated games (finite and infinite time horizon); Folk’s theorem.
3. Econometrics. Linear regression with single regressors and with multiple regressors. Non linear (in variables) regression.
4. Oligopoly theory. Cournot and Bertrand models; SCP paradigm; concentration. Multiplant monopolist and collusion. Stackelberg model; entry.
5. Price discrimination: Pigou classification; third degree discrimination; two-part tariffs; quality, quantity and autoselection. Tying and bundling.
6. Differentiated products: Spence model; address models: horizontal and vertical differentiation with exogenous location.
7. Empirical analyses in Industrial Economics. Competition and regulation policies.

The course is organized into lectures and practical classes. Workshops will be organized for discussing applications and real cases.

The course is organized into lectures and practical classes. Workshops will be organized for discussing applications and real cases.

• Jeffrey R. Church and Roger Ware. Industrial Organization: A Strategic Approach. New York: McGraw-Hill, 2000.
• James Stock and Mark W. Watson. Introduction to Econometrics, 3rd Edition, Addison-Wesley, 2010.
• Lecture notes, exercises with solutions and past exams will be posted on the website

The course material is composed of three parts:
• Jeffrey R. Church and Roger Ware. Industrial Organization: A Strategic Approach. New York: McGraw-Hill, 2000.
• James Stock and Mark W. Watson. Introduction to Econometrics, 3rd Edition, Addison-Wesley, 2010.
• Lecture notes, exercises with solutions and past exams will be posted on the website
After studying the lecture notes, which provide the topics to focus on, students are asked to deepen their knowledge of the topics by referring to the textbooks.

Grading in the course will be on the basis of performance on a written examination of 1h45' in total. The exam is made by four questions: three are quantitative exercises and the fourth is the interpretation of an econometric regression. The weight of each question on the final grade is the same.

The online exam will cover all the topics dealt with during the course and it is intended to ascertain: i) the knowledge of the topics; ii) the technical ability to solve specific exercises; iii) the ability of the students to adopt an economist’s persective to specific problems.
The online exam takes place within the Lockdown browser and employs the Respondus Monitor. It lasts 1 hour and consists of about 20 multiple-choice questions divided into two sections: 1) Industrial Organization theory, 2) Econometrics. The number of questions allocated to each section reflects the relative weight of each part in the course (3/4 to Industrial Organization theory and 1/4 to Econometrics). Wrong answers will be graded negatively. Unanswered questions will receive a null score. Each question is weighted equally.
A calculator is made available via the exam platfom interface. Students are allowed to use blank sheets and a pen, provided that they clearly show that their desks are otherwise clear. A Virtual Classroom is active during the course, through which students can communicate with the instructors. The Virtual Classroom is recorded. Students deciding to withdraw have to communicate their decision via the Virtual Classroom.
The consultation or use of any kind of material (e.g., textbooks, lecture notes, slides) during the exam is strictly forbidden. Any form of communication is strictly forbidden. Disruptions in the Lockdown browser will lead to the annulation of the exam.
The solutions to the exams will be published jointly with the results. No oral exam is foreseen.

Grading in the course will be on the basis of performance on a written examination of 1h45' in total. The exam is made by four questions: three are quantitative exercises and the fourth is the interpretation of an econometric regression. The weight of each question on the final grade is the same.

No blended exam is foreseen

© Politecnico di Torino

Corso Duca degli Abruzzi, 24 - 10129 Torino, ITALY

Corso Duca degli Abruzzi, 24 - 10129 Torino, ITALY