70068 - Economics of Competition Policy

Learning outcomes

The course provides students with an introduction to the economics of antitrust. With the use of the basic tools of industrial organization, we will analyze the main aspects of competition policy, with reference also to antitrust cases. Students will actively participate by studying and discussing case studies as well as by solving problem sets. At the end of the course, students will be able to critically interpret the main policy issues in the field of antitrust.

Course contents

Main reference: Massimo Motta, "Competition Policy: Theory and Practice", Cambridge University Press, 2004.

Instructors: Elena Argentesi (sections 1, 2, 3, 4) and Marco Grazzi (sections 5, 6, 7)

1. Introduction to competition policy: definition, history, and the law (Chapter 1)

• Definition of competition policy
• History of competition policy in the EU and in the US
• Objectives of competition policy

2. Market power and welfare (chapter 2 except paragraphs 2.3.2.2, 2.3.5,2.4.3, 2.6.3.4)

• Definition of market power
• Allocative efficiency, productive efficiency, and dynamic efficiency
• Public policies and incentives to innovate

3. Market definition and assessment of market power (chapter 3)

4. Collusion: an economic definition (chapter 4 except par. 5)

• The sustainability of collusion in a repeated game
• Factors that facilitate collusion
• Competition policies against collusion

5. Horizontal mergers (chapter 5)

• Unilateral effects
• Pro-collusive effects
• Remedies: structural and behavioral remedies
• Merger policy in the EU

6. Vertical restraints and vertical mergers (chapter 6)

• Intra-brand competition
• Inter-brand competition
• Anti-competitive effects

7. Predation, monopolization, and other abusive practices (chapter 7)

• Predatory pricing
• Non-price monopolization: strategic investment, bundling, tying, incompatibility, exclusive contracts
• Price discrimination

8. Discussion of antitrust cases
Students will be asked to study and discuss in class some antitrust cases (each case will be assigned to a small group of students). The discussion of cases will be part of the final grade. The cases are available at the course webpage on AMS Campus at the link "materiale didattico". Non-attending students will be asked question about one case at their choice in the written exam.

Readings/Bibliography

Massimo Motta, "Competition Policy: Theory and Practice", Cambridge University Press, 2004.
Additional material available on AMS Campus.

Teaching methods

The course consists of lectures, case discussion by students, and discussion of problem sets.

Assessment methods

There will be two mid-term exams, one during the course and one at the end of it. The final grade will also take into account each student's participation in class, especially in the discussion of cases. Students are strongly encouraged to attend the whole course and to pass the exam through the mid-terms. The assessment for non-attending students consists of a written exam on the whole program included one of the assigned antitrust cases at their choice.

Teaching tools

Each topic will be covered at a theoretical level, and in many cases there will also be a case study looking at relevant empirical analysis. Students are required to read and discuss case studies in class. The full reading list, the case studies, and slides of the lectures will be available on AMS Campus.

Office hours

See the website of Elena Argentesi

See the website of Marco Grazzi