Industrial Economics; Competition, Strategy and Policy
Module Code: EC3071
Module Title: Industrial Economics; Competition, Strategy and Policy
- ECTS Weighting: 10
- Semester/Term Taught: Michaelmas + Hilary Term
- Contact Hours: 44 hours of lectures and 10 hours of tutorials
- Module Personnel: Lecturer - Paul Gorecki / Lecturer - Orla Lane
On successful completion of this module students will be able to:
- analyse interactions between firms using game theory concepts
- measure how consumer welfare changes in response to different behaviours of firms in the market
- identify how cooperation between firms can help and how it can hurt final consumers
- analyse how dominant firms use different business techniques to achieve and maintain dominance in the market
- explain the goals of competition policy and the techniques used by competition authorities to assess deviations from legitimate competitive behaviour
- describe the institutional background to competition policy and regulation in Ireland and Europe
- use economic tools and examples of relevant cases to form and support arguments and opinions
Module Learning Aims
Markets with a small number of interdependent sellers provide the setting for Industrial Economics: Competition, Strategy and Policy. This module stresses the importance of the role of game theory in the analysis of such markets and provides a forum for students to move beyond a two-dimensional (price and quantity) evaluation of market performance. The following topics are likely to be covered in the module: welfare economics and consumer surplus; competition; monopoly; contestability and barriers to entry; oligopoly and non-co-operative game theory: Cournot, Bertrand and Stackelberg; cartels; vertical agreements; dominant firms; monopolistic competition and product differentiation; price discrimination; predation; innovation and R&D; network effects; advertising and market structure; state aid; industrial policy and European competition policy.
Case studies and market analyses are used throughout the module. Students are required to complete problem sets and make presentations. Students are strongly advised to review their EC2010 notes on microeconomics and EC1030 notes on mathematics (or equivalents) as familiarity with material from these modules is assumed.
Michaelmas Term: welfare economics and consumer surplus; competition; monopoly; contestability and barriers to entry; oligopoly and non-co-operative game theory: Cournot, Bertrand and Stackelberg; cartels; and, vertical agreements.
Hilary Term: monopolistic competition and product differentiation; price discrimination; predation; innovation and R&D; network effects; advertising and market structure; state aid; industrial policy and European competition policy.
Recommended Reading List
There is no core module textbook. However, students should have fairly regular access to one of the following textbooks or their equivalents:
- Martin, S., Industrial Organisation in Context, Oxford University Press, 2010
- Lipczynski, J., J.O.S. Wilson and J.Goddard (2013), Industrial Organization: Competition, Strategy and Policy, Pearson Education Ltd., 4th edition
- or Carlton, D and J. Perloff, Modern Industrial Organization, Pearson: Addison-Wesley, 4th/Global edition, 2015
A number of substitute textbooks exist and students are encouraged to browse on a regular basis.
In addition, the following two books contain interesting competition policy case studies:
- J. Kwoka & L. White (eds.), The Antitrust Revolution: Economics, Competition and Policy, Sixth Edition, Oxford University Press, 20134;
- B. Lyons (ed.), Cases in European Competition Policy: The Economic Analysis, Cambridge
University Press, 2009.
- A more comprehensive reading list will be distributed to students at the beginning of each term.
Module Pre Requisite
A project to be submitted by the end of Michaelmas Term will account for 10% of your overall grade. A second assignment to be submitted in Week 7 of Hilary Term will also account for 10% of your overall grade. Short presentations in the Michaelmas and Hilary Terms will account for, in total, 10 %. The penalty for late submission/no show for presentation is 100 per cent; there will of course be no penalty imposed on late submission/no show for presentation provided that there is an appropriate medical certificate (or equivalent). The final exam will account for the remaining 70% of your overall grade. In the final examination, students must answer two questions (from four) based on the material covered during the first term and two questions (from four) based on the material covered during the second term.