'Across the West powerful firms are becoming even more powerful' (The Economist, Nov. 15th, 2018).

This course adresses the economics of market power (reasons, consequences and remedies). Questions pursued include: Do firms have market power and how can we find out? Why did firms in the IT business (Facebook, Amazon, ...) grow so incredibly fast? What is so specific about 'information products`? Why do firms merge and why do mergers come in waves? What are the economic consequences of mergers and why do so many mergers fail? Why do firms collude and why do cartels occur in some sectors more often than in others? How could we best promote R&D? Should we take away patents (from pharmaceutical companies)? Does competition promote (product) innovation and improve product quality? Why do companies (like Microsoft and Google) tie different products together and why do competition authorities impose fines for tying. Do consumers benefit from privacy (the fact that firms do not know their characteristics)? 

The course focuses mainly on the theory of the firm with an emphasis on markets with imperfect competition; but it also discusses empirical applications of the theory. It aims at providing the foundations for writing a master thesis in this field. The overall goals of this course are to develop an understanding of key forces affecting functioning of markets, and to develop skills in modeling, critical thinking, and formal analysis using economic models.

By the end of the course, students will be able to (a) model and predict market outcomes in imperfectly competitive markets (b) explain the differences in market efficiency amongst the various market settings (c) evaluate the strategies and responses of firms with the various market settings (d) understand the potential sources of market failure in markets with imperfect competition, as well as the policy instruments available to competition authorities and regulators monitoring such markets.

Attendance is compulsory. Students are required to attend 80% of the total amount of class contact hours.

Lectures, books, articles to be read and discussed in class, homework assignments.

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