AØKA08020U Industrial Organization
This course is an introduction to modern industrial organization based on game-theoretic analysis. Industrial organization is the study of how (product) markets work and how firms compete, in particular when there are a limited number of firms in the market. It addresses questions such as how firms acquire and use market power, and how firms interact strategically. Insights from industrial organization has implications for competition policy. For example, should competition authorities try to block mergers? Should they try to prevent firms from colluding? If so, how can they best do that?
The course covers the basic theory of industrial organization (with only a quick look at empirical methods). In particular, the following areas are discussed (but, due to time constraints, possibly not all of these in any given year):
Static oligopoly theory with a homogeneous good (Bertrand, Cournot, Edgeworth, Kreps-Scheinkman).
Repeated oligopoly interaction and tacit collusion (including, inter alia, the Rotemberg-Saloner and Green-Porter models). Factors that hinder and facilitate collusion.
Price discrimination (behavior-based price discrimination, static 3rd degree price discrimination, welfare effects).
Vertical control (double marginalization).
Empirical tests of oligopoly (Bresnahan-Lau).
Product differentiation (Hotelling).
Limit pricing and predation (Milgrom-Roberts).
Markets with network goods.
- Strategic incentives.
After completing the course, the student should be able to:
Describe and explain main methodologies, concepts and issues used in the theory of industrial organization.
Understand the logic behind the results of the formal models studied in the course.
Select relevant theories and methods for analyzing questions related to industrial organization.
Solve formal models using tools from mathematical optimization theory and game theory.
Analyze formal models that are variations of the models and theories covered in the course and to provide economic intuition for the results obtained.
- Critically think about and discuss competition policy questions, in light of the theories learned in the course.
Please note that details of the syllabus and the course
content may change.
Main textbook (selected chapters):
Belleflamme, Paul and Martin Peitz (2015), Industrial Organization: Markets and Strategies, 2nd edition, Cambridge University Press.
Shorter segments of the following texts:
Church, Jeffrey and Roger Ware (2000), Industrial Organization: A Strategic Approach, McGraw-Hill
Tirole, Jean (1988), The Theory of Industrial Organization, MIT Press.
Osborne, Martin J. (2004), An Introduction to Game Theory, Oxford University Press.
Ordover, Janusz A. (2008), “Durable Goods Markets and Aftermarkets.” In The New Palgrave Dictionary of Economics. eds. by Steven N. Durlauf, and Lawrence E. Blume, Basingstoke: Palgrave Macmillan.
2 hours lectures 1 times a week from week 6 to 20 (except hollidays).
2 hours exercise classes 1 times a week from week 6 or 7 to 21 (except hollidays).
The overall schema for the BA 3rd year can be seen at https://intranet.ku.dk/polit_ba/undervisning/Lektionsplan-F18/Sider/default.aspx
or the Master at https://intranet.ku.dk/ECONOMICS_MA/COURSES/COURSECATALOGUE-F18/Pages/default.aspx
Timetable and venue:
To see the time and location of lectures and exercise classes please press the link/links under "Se skema" (See schedule) at the right side of this page (E means Autumn, F means Spring). The lectures is shown in each link.
You can find the similar information partly in English at
-Select Department: “2200-Økonomisk Institut” (and wait for respond)
-Select Module:: “2200-F18; [Name of course]”
-Select Report Type: “List – Weekdays”
-Select Period: “Forår/Spring – Week 5-30”
Press: “ View Timetable”
Please be aware regarding exercise classes:
- The schedule of the exercise classes is only a pre-planned schedule and can be changed until just before the teaching begins without the participants accept. If this happens it will be informed at the intranet or can be seen in the app myUCPH and at the above link.
- If too many students have wished a specific class, students will be registered randomly at another class.
- It is not possible to change class after the second registration period has expired.
- If there is not enough registered students or available teachers the exercise classes may be jointed.
- The student is not allowed to participate in an exercise class not registered, because the room has only seats for the amount of registered student.
- That the study administration allocates the students to the exercise classes according to the principles stated in the KUnet.
Registration and information for students not enrolled please find more information at Study Economics.
- 7,5 ECTS
- Type of assessment
- Written examination, 3 hours under invigilationat the computers of the 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
- No external censorship
The course can be selected for external assessment.
- Exam period
The exam takes place
June 1, 2018
at the exam venues of the university.
The exact time of the exam will be informed in the Self-Service at KUnet.
The reexam takes place
August 7, 2018
If only a few students have registered for the written reexam, the reexam might change to oral including the date, time and place, which will be informed in KUNet or 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 with no or only a few minor weaknesses be able to demonstrate an excellent performance displaying a high level of command of all aspects of the relevant material and can make use of the knowledge, skills and competencies listed in the learning outcomes.
- Class Exercises