Description
Objectives
The course covers business strategies in imperfectly competitive markets, that is, in monopolies and in oligopolies. For oligopolies emphasis is put on strategic interaction and games. The course also covers the impact of business decisions on consumers and, in this respect, the role of regulators. Upon completion of the course students should be able to i) understand business decisions in imperfectly competitive markets and the corresponding social impact, ii) think strategically, and iii) using logical reasoning, analyse with some formality market equilibria, applying simple models.
Syllabus
0. Course presentation 1. Revision of some principles in Microeconomics 2. Games and strategy 3. Definition of the relevant market and concentration measures 4. Dominant firm and monopolistic competition 5. Oligopoly: quantity competition without leadership; price competition without leadership; quantity competition with leadership; price competition with leadership; conjectural variations, other competing variables and oligopoly solutions 6. Cartels, collusion and dynamic stability 7. Pricing strategies 8. Product differentiation 9. Market power 10. Entry and exit: barriers to entry; predation; mergers; free entry and social welfare 11. Innovation 12. Networks 13. Competition Policy and Regulation
Prerequisites
Prior frequency of Microeconomics is favorable, but not required. The basic microeconomic principles are reviewed at the beginning of the course.
Cross Competence Component
This UC allows the development of: transversal competences in Critical Thinking, namely strategic thinking and approaches to problem solving; Interpersonal and intrapersonal skills (communication and teamwork, enthusiasm and self-motivation); Information and media literacy (ability to locate and access information as well as critically analyze and extract relevant content). The assessment percentage associated with these skills should be around 6%.
Ethical Principles
All members of a group are responsible for the group's work. In any assessment, every student shall honestly disclose any help received and sources used. In an oral assessment, every student shall be able to present and answer questions about the entire assignment and solution.