85071 - Economics Of Competition

Learning outcomes

The course provides an introduction to the economics of antitrust. With the use of basic tools of industrial organization, we will analyze the main aspects of competition policy, such as collusive agreements, mergers, vertical restraints and abuse of dominance. These issues will be discussed also with reference to recent antitrust cases. Students will actively participate by studying and discussing case studies. 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.

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 will be available on the Virtuale platform. Non-attending students will be asked question about one case at their choice in the exam.

Readings/Bibliography

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

Other reference (optional):
Fumagalli, Motta, Calcagno, "Exclusionary Practices: The Economics of Monopolisation and Abuse of Dominance", Cambridge University Press, 2018.

Additional materials will be made available on the Virtuale platform.

Teaching methods

The course consists of lectures, case discussions and presentations by students, and occasionally presentations by external experts.

Assessment methods

The assessment is based on a written online exam and on the students' discussion of antitrust cases.

The discussion of cases for students with 6 credits (LM B&A and Food) is optional and can be done by submitting an essay of about 3000 words or 12 slides by January 10th on a case which has previously been agreed with the professor. Students can contact the tutor of the course, Stefano Azzolina, for information on this activity.

Teaching tools

Lecture slides will be available on the Virtuale platform. Case studies will also be assigned during the course.

Office hours

See the website of Elena Argentesi