Industrial Organization 2

Course Description: 

This course provides an introduction into the theory of industrial organization. The students
will get familiar with basic concepts of industrial economics and their relationship to other elds
of economics. The course is based on microeconomic theory and applies it to the study of price
and competition in imperfect markets. It therefore builds on what you have learned during
your previous courses in microeconomics. During the course we will discuss dierent forms of
oligopolistic competition starting from classical models of Cournot and Bertrand and then we
will examine more advanced theories advocated by Hotelling, Salop and others, that may be
used in this context. The main emphasis will be put on on the study of rm strategies that are
characteristic of market interaction: price competition, product positioning, advertising, and
so one. We will also discuss policy implications of dierent industry structures. In particular,
we will discuss the implications of theoretical models for competition policy.

Learning Outcomes: 

Successful completion of the course enables students to
Summarize and critically evaluate ideas on the topic covered in the course.

Possess a thorough understanding of selected analytical models employed in industrial
Be able to evaluate social eects of dierent industry structures and dierent forms of
Possess a critical understanding of the interaction between theory and practice of Com-
petition Policy (Antitrust)


During the course students will be send the problem sets and asked to solve the problems.
They can handle the solution in written or electronic form. The credit for problem solving will
count at most 50% of the grade. There will be nal exam which counts for at least 50% of the


Students should be familiar with basic concepts of microeconomics on the
level of Microeconomic Theory I and II courses. In particular, students should know
main concepts of the non-cooperative game theory and contract theory.

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