Industrial Organization

Many markets of interest are dominated by a few firms. These firms not only choose their prices but also the quality and the design of their products. They engage in advertising campaigns and make investments in R&D. They also decide to enter or exit markets, to merge or not with other firms, to vertically integrate or not with other firms in the value chain, to collude with rival firms etc. These choices have far-reaching effects on the markets in which they operate and these effects may have wider repercussions throughout the economy. This course presents an approach - based on strategic decision making - for understanding the functioning of such markets.

Industrial Organisation has experimented a revival in recent years thanks to the Internet. We also use this approach to understand issues such as pricing techniques (price discrimination), Internet-based intermediation, consumer search and switching costs, etc. The first part of the course introduces the student to the workhorse theoretical models used in Industrial Organization and some more recent applications. The second part of the course initiates the student in the empirical analysis of market power, with applications to the estimation of search and switching costs models.