Industrial Organization

Code

2594

Academic unit

Faculdade de Ciências e Tecnologia

Department

Departamento de Ciências Sociais Aplicadas

Credits

5.0

Teacher in charge

Duarte Miguel Machado Carneiro de Brito

Weekly hours

4

Total hours

72

Teaching language

Português

Objectives

This course aims at providing students with basic knowledge of the main issues in the theory of industrial organisation, and to acquaint them with the most widespread models, combining analytical rigour with intuitions and examples.

Prerequisites

No prior knolwedge of Economics required.

Subject matter

Revision of some basic economic concepts: supply, demand, market equilibrium, cost functions, consumer surplus, profits and welfare.

 

The Structure-Conduct-Performance Paradigm. Market definition and concentration indices.

 

Basic market structures: monopoly, perfect competition and the dominant firm

 

Introduction to Game Theory: normal form and extensive form games. Nash equilibrium and sub game perfect equilibrium.

 

Strategic Interaction: The Cournot, Bertrand and Stackelberg models.

 

Dynamic price collusion.

 

Entry, accommodation and exit.

 

Additional topics: price discrimination, product differentiation, mergers and acquisitions, R&D, vertical control, network economies.

 

Bibliography

Basic bibliography (in English)  

Luís Cabral, Industrial Organization, 2000, The MIT press

Robert Gibbons, A Primer in Game Theory, January 1992, Prentice Hall / Harvester Wheatsheaf

Jeffrey Church and Roger Ware, Industrial Organization: a Strategic Approach, 2000, McGraw-Hill

Alternative books (in English)

Carlton e Perloff, Modern Industrial Organization, 3ª Edição

Oz Shy, Industrial Organization: Theory and applications, 1995, MIT press

More advanced (in English):

Jean Tirole, The theory of Industrial Organization, 1991, MIT press

Stephen Martin, Advanced Industrial Economics, Blackwell Publishers

Teaching method

Lectures followed by problem solving sessions. The Competition Strategy Game illustrates some of the issues discussed in class.

Evaluation method

Exemption from final exam for the students approved in the following:

Mid-term test #1: 30% (minimum of 7.5/20 required)
Mid-term test #2: 50% (minimum of 7.5/20 required)
Online quizzes: 10%
Discussions in class: 10%

 

Courses

• Engenharia Electrotécnica e de Computadores