AØKA08082U  Advanced Industrial Organization

Volume 2016/2017

MSc programme in Economics – elective course


This course advances on some topics from the undergraduate course on Industrial Organization (IO). The course covers both theoretical and empirical IO. Topics include Price Discrimination, Auctions, Regulation of Monopolies, Demand Estimation, Firm Heterogeneity, Moment Inequalities in Applied Work, Market Power, Mergers, Collusion, Entry and Exit, Single Agent Dynamics, Two-sided Markets, Vertical Relationships, and Behavioral Industrial Organization.

Learning Outcome

The aim is that the students get an advanced knowledge of modern IO theories, and how theory and data can be combined to shed light on real world problems such as competition policy (anti-trust).

The students should acquire a level of knowledge, where they understand the details of the theories and are able to analyze problems within industrial organization using the acquired theoretical and empirical tools. It is the aim that the student learns how to model economic problems in markets with few firms, using the appropriate (often game theoretic) methods, as well as how these models are solved. The students should also learn how empirical studies build on the theoretical models (structural estimation), the chief difficulties faced by such empirical work, and how these difficulties can be overcome. The students should be able to discuss the real-world relevance of the theories in an informed manner based on empirical data.

The book by Tirole is a classic text on IO theory. Although it never really goes out of date and is still a standard reference for every serious IO specialist, the book is now almost 30 years old. To bring the students to the research frontier, more recent research papers will cover various topics in theoretical IO. In addition, a number of research papers will cover empirical approaches to IO.

Within the areas covered in the course, the aim is that students should be able to:


  • Understand the theories at a level as found in research papers published in the major journals.
  • Understand how theoretical models underpin modern empirical IO (structural estimation), and the chief difficulties faced in empirical work, and how these difficulties are overcome in the modern literature.


  • Solve formal models using tools from mathematical optimization theory and game theory.
  • Analyze questions related to industrial organization drawing upon one or more theories and to present this analysis in writing using a scientific and concise language.


  • Analyze formal models that are variations of the models and theories covered in the course and to provide economic intuition for the results obtained.


Jean Tirole: “The Theory of Industrial Organization” MIT press, 1988, plus a number of journal articles.

The course Industrial Organization or equivalent as well as basic game theory and econometrics is recommended.
3 hours of lectures per week for 14 weeks

Timetable and venue:
To see the time and location of classroom please press the link under "Se skema" (See schedule) at the right side of this page (16E means Autumn 2016).

You can find the similar information partly in English at
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-E16; [Name of course]””
-Select Report Type: List
-Select Period: “Efterrår/Autumn – Weeks 30-3”
Press: “ View Timetable”
7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
Individual written closed book exam at the computers of Copenhagen University.
The exam assignment is given in English and must be answered in English.
Exam registration requirements


Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
Exam period

The exam takes place December 22, 2016 in the morning at Peter Bangs Vej 36. 2000 Frederiksberg http:/​/​pc-eksamen.ku.dk/​pc_exam The exact time of the exam will be informed in the Self-Service at KUnet.

For enrolled students more information about examination, exam/re-sit, rules etc. is available at the student intranet for Examination (English) and student intranet for Examination (KA-Danish).


The written re-exam takes place February 17, 2017 at Peter Bangs Vej 36. 2000 Frederiksberg http:/​/​pc-eksamen.ku.dk/​pc_exam The exact time of the exam will be informed in the Self-Service at KUnet mid-July.

If only a few students have registered for the re-exam, the exam might change to an oral exam including the date for the exam, which will be informed  by the Examination Office.

Criteria for exam assesment

Students are assessed on the extent to which they master the learning outcome for the course.

To receive the top grade, the student must be able to demonstrate in an excellent manner that he or she has acquired and can make use of the knowledge, skills and competencies listed in the learning outcomes.

  • Category
  • Hours
  • Lectures
  • 42
  • Preparation
  • 161
  • Exam
  • 3
  • Total
  • 206