B1799 - Industrial Organization

Learning outcomes

At the end of the course students get an understanding of how macroeconomic and industry conditions determine the evolution of the global economic environment by analyzing and understanding economic and industry data

Course contents

This course introduces a series of topics related to firm strategies (in particular, pricing), which will later be revisited in the companion course on Behavioral Economics. These topics will be analyzed here through the lens of mainstream economic theory. In the subsequent course, a parallel perspective will be offered—tackling the same issues by combining elements of economics and psychology to understand how and why people behave when facing real-world situations.

The course is structured around four main pillars:

1. Basics of Competition Strategies

   • Basics of game theory (strategic interaction and best response strategies)

   • Price vs. quantity competition

   • Sequential games with strategic interaction

2. Sources of Market Power

   • Horizontal product differentiation

   • Vertical product differentiation

   • Advertising strategies

3. Pricing Strategies

   • Price discrimination with observable consumer characteristics (group pricing)

   • Price discrimination in the absence of observable consumer characteristics (menu pricing)

4. Information Asymmetries

   • Asymmetric information, moral hazard, and adverse selection

   • Pricing and advertising as signaling tools

Readings/Bibliography

Slides and other teaching materials will be made available on virtuale.unibo.it [https://virtuale.unibo.it] from the very beginning of the course.

Textbook:
Belleflamme, Paul, and Martin Peitz, Industrial Organization: Markets and Strategies, Cambridge University Press, 2015.
Required chapters: 3, 4, 5, 6, 8, 9, 12, 13.

Teaching methods

Traditional lecture, in-class discussion,teamworks.

Assessment methods

The written exam covers the entire course syllabus and is worth up to 20 points toward the final grade (out of 30). It consists of a set of multiple-choice questions and one short open-ended question, chosen by the student from two given options.

For attending students, the remaining 10 points will be awarded based on in-class participation and the evaluation of problem sets assigned during the course.

For non-attending students, these 10 points will instead be awarded based on additional questions included in an extended version of the final written exam.

Note: To qualify as an attending student, a minimum attendance rate of 70% is strictly required.

 

Grading scale:

• <18: Failed

• 18–23: Sufficient

• 24–27: Good

• 28–30: Very good

• 30 e lode: Excellent

 

Teaching tools

All teaching materials will be uploaded to the course page on the Moodle platform: http://virtuale.unibo.it

Office hours: By appointment (please contact the instructor via email).

 

Office hours

See the website of Stefano Antonio Bolatto