This course examines strategic interactions between firms and the determinants of industrial structure. The first part of the unit is theoretical. It concentrates on the analysis of various aspects of oligopolistic industries, including collusion, vertical relationships, networks and entry. The unit also examines the need to constrain firms’ behaviour by competition policy. Furthermore, students apply economic theory to case studies in e.g. vertical restraints in the European car industry and the battle between Blu-Ray and HD DVD.
The second part of the course will cover empirical industrial economics, focusing on i) competition policy analysis and ii) understanding firm performance. The topics to be covered include market definition, measuring market power, mergers, vertical integration and vertical restraints, product market competition and productivity, and R&D. The unit will enable students to apply economic theory to practical policy questions.
On successful completion of the course, students will be:
Summative Assessment
Three-hour closed book examination in May/June (100%).
Formative Assessment
Two essays (one per term).
