AØKA08020U Industrial Organization

Volume 2013/2014
BSc in Economics
MSc in Economics
The course covers the basic theory of industrial organization. In particular, the following areas are treated:

  • Monopoly
  • Price Discrimination
  • Vertical Control
  • Short run price competition and Cournot oligopoly
  • Dynamic price competition and tacit collusion, cartels
  • Empirical tests of oligopoly
  • Product differentiation
  • Entry and Exit Decisions
  • Limit pricing and predation
Learning Outcome

This course is an introduction to modern industrial organization based on game-theoretic analysis. Industrial organization concerns how markets work and firms compete, especially when there are a limited number of firms in the market. The goal of the course is that the students after having successfully participated in the course are able to:

  • Describe the main theories of monopoly behavior and of oligopoly competition and to compare them in terms of central features such as prices and welfare.
  • Describe the different kinds of price discrimination, the ways in which price discrimination can be implemented, and how price discrimination affects the different economic agents involved.
  • Describe how vertical restraints work and what their effects are in terms of profits and welfare.
  • Describe the main theories of collusion and to identify factors that hinder and facilitate collusion.
  • Describe the main theories of entry, accommodation, and exit and to relate them to firms’ business strategies.
  • 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.

Please note that details of the syllabus and the course content may change.

Main textbook:

  • Belleflamme, Paul and Martin Peitz (2010), Industrial Organization: Markets and Strategies, Cambridge University Press.
  • Selected chapters.

Other texts:

Competencies and knowledge from participating in Micro 1-2-3 (Micro A, B, C) or equivalent.
2 hours of lectures and 2 hours of classes per week for 14 weeks
  • Category
  • Hours
  • Class Exercises
  • 28
  • Exam
  • 3
  • Lectures
  • 28
  • Preparation
  • 147
  • Total
  • 206
7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
A 3 hours written examination taking place at Peter Bangs Vej 36.
Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
100 % censurship
Exam period
Will be updated before the start of the semester
Same as ordinary. But if only a few students have registered for the re-exam, the exam might change to an oral exams with a synopsis to be handed in. This means that the examination date also will change.
Criteria for exam assesment
The Student must in a satisfactory way demonstrate that he/she has mastered the learning outcome of the course.