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Industrial Economics and Regulation 2017/2018

  • 5 ECTS
  • Taught in Portuguese
  • Continuous Assessment

Objectives

The students should be able to describe and explain the main determinants of market structure. Namely, oligopolistic structures, concentration strategies and other strategies that can be followed by firms in relatively concentrated markets. They should present and explain the State’s instruments (in Portugal) to promote competition.

Recommended Prerequisites

Microeconomics; Microeconomic Analysis of Markets

Teaching Metodology

Questioning, Expository and Flipped Classroom Methodologies

Body of Work

1. Introduction
1.1. Definition of Industrial Economics
1.2. Main questions of Industrial Economics
1.3. The Role of Government’s Policies
1.4. The Paradigm of Industrial Economics

2. Market Structures
2.1 Horizontal Concentration
2.2 Vertical Concentration
2.3 Global Concentration
2.4 Concentration Measures
2.5 The Role of the (Portuguese) Competition Authorities

3. Oligopoly Models
3.1 Game Theory
3.2 Cournot Model
3.3 Applications of Cournot Model:
3.3.1 Cournot with different Marginal Costs
3.3.2 Cournot with R&D Investments
3.3.3 Cournot with Advertising Costs
3.3.4 Cournot with Imperfect Substitutes
3.4 Bertrand Model
3.5 Stackelberg Model
3.6 Horizontal Mergers

4. Market Structures and Firm Behavior
4.1 Limit Pricing
4.2 Product Proliferation
4.3 Product Differentiation
4.4 Experimental Economics and Hotelling’s Model – Some results

Recommended Bibliography

"Industrial Organization: Contemporary Theory and Empirical Applications", 4th Edition. Lynne Pepall, Dan Richards, George Norman, 2008, Wiley-Blackwell
“Economia Industrial”, Luís Cabral; edição/reimpressão 2004. McGraw-Hill

Complementary Bibliography

“Modern Industrial Organization”, Dennis W. Carlton, Jeffrey M. Perloff,2005. Prentice-Hall.

Weekly Planning

1
Presentation
1.1 Definition of Industrial Economics
2
1.2. Main questions of Industrial Economics
1.3. The Role of Government’s Policies
1.4. The Paradigm of Industrial Economics
3
2.1 Horizontal Concentration
4
2.2 Vertical Concentration
5
2.3 Global Concentration
2.4 Concentration Measures
2.5 The Role of the (Portuguese) Competition Authorities
6
3.1 Game Theory
7
3.2 Cournot Model
3.3 Applications of Cournot Model:
3.3.1 Cournot with different Marginal Costs
8
3.3 Applications of Cournot Model:
3.3.2 Cournot with R&D Investments
3.3.3 Cournot with Advertising Costs
3.3.4 Cournot with Imperfect Substitutes
9
Revision of concepts for the first test.
First test of the continuous assessment program
10
3.4 Bertrand Model
3.5 Stackelberg Model
11
3.5 Stackelberg Model (Cont.)
3.6 Horizontal Mergers
12
4.1 Limit Pricing
4.2 Product Proliferation
13
4.3 Product Differentiation
14
Revision of concepts for the second test.
Second test of the continuous assessment program
15
4.4 Experimental Economics and Hotelling’s Model – Some results

Demonstration of the syllabus coherence with the curricular unit's objectives

The sequence of the syllabus is adapted to the objectives. The syllabus begins with some introductory concepts on Industrial Economics (1.1, 1.2 and 1.4) and on government’s intervention on competition and industrial policy (1.3). Section 2 details on market structure, determinants of concentration and concentration measuring. Section 3 details oligopoly strategy; while section 4 relates to specific strategic behavior of firms in certain conditions.

Demonstration of the teaching methodologies coherence with the curricular unit's objectives

Given that these objectives focus on describing and explaining the determinants of market structures, the methodology meets those objectives by starting with theoretical explanations followed by applications to real cases, namely on the presentation of news on the topics taught in order to demonstrate their importance and applicability.At the end of each chapter and using the platform Kahoot, the students will have the opportunity to test themselves relatively to their knowledge regarding the contents of the Curricular unit, confronting their option with the rest of the class.

relevant generic skillimproved?assessed?
Achieving practical application of theoretical knowledgeYesYes
Analytical and synthetic skillsYesYes
Balanced decision makingYesYes
Commitment to effectivenessYesYes
Commitment to qualityYesYes
CreativityYesYes
Information and learning managementYesYes
Problem Analysis and AssessmentYesYes
Problem-solvingYesYes
Research skillsYesYes
Self-assessmentYesYes
Written and verbal communications skillsYesYes
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