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Course Catalogue 2018 - 2019

Course Programme Minor Lecturer

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Industrial Organisation
Course catalogue number 6012B0223Y

Credits 6 EC

Language of instruction English

Time period(s) Sem. 1 Sem. 2

College/graduate College of Economics and Business

Lecturer(s) Dr A.P. Kiss (co-ordinator)

Contact UvA Economics and Business

REC E-building, Roetersstraat 11, 1018 WB Amsterdam
kamer room 1.63
020 525 4133

Is part of Bachelor's Economics and Business

Exchange programme Exchange Programme UvA
Economics and Business

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Objectives
The aim of the course is to provide students with an economic framework for analysing imperfectly
competitive markets and to connect the theory to real-life strategic behaviour through short case
studies and econometric analyses.
By completing the course students will be able to:
Recognise, interpret and design optimal non-uniform pricing schemes in a monopoly setting;
model competition between large firms with strategic motivations;
calculate and interpret widely used measures for market power;
discuss the design and optimal pricing of vertically or horizontally differentiated products;
distinguish predatory behaviour from regular competitive actions;
discuss and model firms' strategies for entry deterrence;
analyse motivations for collusive behaviour and predict the stability of cartels;
explain how advertising is used strategically by firms.
All these topics within the course will proceed by:
Introducing examples from the corporate world for the phenomenon under study;
discussing the stylised structure of the firms' problems and building simple economic models around
them;
solving the models parametrically (in the lectures) and practicing their solutions numerically (in the
tutorials);
discussing what the models imply for corporate strategy and public policy in the real world

Contents
The course starts with a quick recap of perfect competition and monopoly, followed by linear and
nonlinear price discrimination by a monopolist. In the second week we cover the standard static
models of quantity and price competition in oligopolistic markets. In the third week we continue with
dynamic interactions and apply them to study anti-competitive practices, such as entry deterrence and
predation.
In the second half of the course we apply the basic models of the first three weeks to study cartel
agreements, mergers and market power abuse and the strategic role of advertising.
The level of the discussion will be intermediate: deep enough to convey the main insights of the
models in a technical manner while ignoring many of the finer details. The tutorials and homework
assignments will provide many opportunities for practice on numerical problems.

Teaching method
A two-hour main lecture will be followed by a two-hour tutorial in smaller groups and a two-hour
seminar (joint tutorial for all groups) at the end of each study week.

Contact hours

Course week Teaching method Hours/week Remarks

1-3 Lecture 2

1-3 Other 2 Responsiecollege

1-3 Class 2

5-7 Lecture 2

5-7 Class 2

5-7 Other 2 Responsiecollege

8 Exam 3

Study materials
Pepall, L., Richards, D. and Norman, G. (2014). Industrial Organization: contemporary theory and
empirical applications. Wiley, 5th edition, ISBN 9781118250303 (c. €73).

Assessment and testing

The course grade is based on three separate elements: three individual homework assignments
(3*10%), a final exam (60%) and a series of group assignments (10%). As a main rule, the results of
the assignments remain valid in the academic year in which the course is taken.
The final exam in week 8 counts for 60% of the grade. It is a 3-hour written, closed-book, multiple
choice questionnaire with a mixture of true-or-false statements and algebraic problems. There is no
midterm examination.
To pass the course the grade of the final exam must be at least a 5.0, and the total weighted average
must be at least 5.5. In case of a resit the final exam grade is disregarded, the grade of the resit must
be at least a 5.0 to pass. The total weighted average of the assignments (40%) and the resit (60%)
must be at least a 5.5. The duration and format of the resit exam is identical to the final exam. As a
main rule, the results of the assignments remain valid in the academic year in which the course is
taken.
For examination dates, please go to UvA Timetable and the UvA Economics and Business academic
calendar.