040101 UK Industrial Organization (BA) (2015W)

Industrial organisation is concerned with the use of economic analysis in studying competition between firms and the evolution of market structure. We will focus on understanding the way firms make decisions and the effects of those decisions on market outcomes like prices, quantities, the type of products offered, and social welfare.

Over the past decade, this has been one of the most exciting areas of economics, as a new generation of game-theoretic models have provided us with new ways of analysing a range of practical issues, and addressing some long-standing empirical questions.

Fundamental questions pursued in this course include: Why are markets organized the way they are? How do the ways in which a market is organized affect firms' behavior? How does the behavior of firms affect the structure of markets and market outcomes? We will also study predatory pricing, cartel stability, the role of non-price competition, and the evolution of high technology industries.

The goals of the course include development of intuition for pricing and other strategic behavior by firms, and development of skills for analysis of formal models. Readings and class discussions will provide background and introduction to a variety of topics. The theoretical models introduced in the lectures will be supplemented with case studies of specific industries.

Target group: Bachelor Students in Economics (2. Studienabschnitt VWL).

Prerequisites: Microeconomics I (Mikroökonomie I) and Game Theory I (SpieltheorieI).