Industrial Organization
Course code
ECON503
Course type
MSc Course
Weekly Hours
2,5
ECTS
5
Term
HS 2022
Language
Englisch
Lecturers
Juniorprof. Dr. Anna Ressi
Please note that exchange students obtain a higher number of credits in the BSc-program at WHU than listed here. For further information please contact directly the International Relations Office.
Course content
The main goal of this course is to provide an introduction to the main concepts and analytical tools of the theory of industrial organization. Industrial organization is a field of microeconomics that studies how firms interact and compete with each other in the market. We will predominantly confront markets characterized by imperfect competition. In these markets, firms can exercise market power and hence need to makestrategicdecisions, i.e. decisions that have an identifiable impact on other market participants. Examples of such strategic choices are price, product variety, investments in advertising, and research and development. The course aims to teach students to use simple game-theoretic models and reasoning, which will crucially improve their understanding of strategic decision-making by firms. We use this analysis to investigate questions such as:
- Why do prices for the same product differ across different customer groups?
- How does product differentiation and advertising and affect the nature of competition?
- Which market characteristics allow and encourage firms to maintain a price-fixing agreement
- How does antitrust policy affect market competition?
At the end of the course, students should have developed an economic perspective to understand and suggest managerial policies and comment on existing competition laws aimed at improving market allocations.
The course consists of 7 sessions (for details please see the Syllabus) and uses a mixture of lectures,problem sets to be solved at home to also prepare for the exam, and a group presentation.
Class dates
| Date | Time |
|---|---|
| Friday, 02.09.2022 | 13:45 - 17:00 |
| Friday, 09.09.2022 | 15:30 - 18:45 |
| Tuesday, 13.09.2022 | 11:30 - 15:15 |
| Monday, 19.09.2022 | 11:30 - 15:15 |
| Friday, 30.09.2022 | 17:15 - 20:30 |
| Wednesday, 05.10.2022 | 15:30 - 18:45 |
| Monday, 10.10.2022 | 15:30 - 18:45 |
| Wednesday, 12.10.2022 | 11:30 - 13:00 |
Learning outcomes
By the end of the course, students will advance their knowledge in different ways:
Learning the concepts of game theory and applying them to practical economic issues and real-world scenarios will
- help you to understand the basic drivers of strategic behaviour and be helpful for your master thesis,
- improve your critical thinking in other courses,
- teach you to structure a complex problem and reduce it to the important core, which will be useful for your university and business career,
- and help you to ask the right questions or detect inconsistencies in discussions, which will improve your communication skills.
Literature
The course and the lecture slides will go relatively closely along the lines of Belleflamme, P., & Peitz, M. (2010). Industrial Organization: Markets and Strategies. 2ndedition. Cambridge University Press.This is the main text you can access for further reading. It will be supplemented with chapters fromPepall, L., Richards, D., & Norman, G. (2014). Industrial Organization. Contemporary Theory and Empirical Applications. 5thedition. John Wiley & Sons.Vohra, R.V. (2020). Prices and Quantities. Cambridge University Press.
Learningmethods
- Lecture
- Problem Sets
- GroupPresentations
Exam
Final grades are determined on the following basis:
- 60% final exam
- 20% problem sets
- 20% group presentation
Total workload
150