Industrial Organization and Competition Policy

ECTS Credits

10 ECTS

Level of Study

Bachelor

Teaching semester

Irregular

Objectives and Content

The purpose of the course is to give students a general introduction to the theory of industrial organisation and to competition policy.

The course deals with basic monopoly theory and theory of competition in markets with few firms (oligopoly theory). Students also receive an introduction to game theory to be able to analyse static and dynamic games. Selected parts of modern competition policy are reviewed.

A key theme in the course is market power and how it affects society and consumers. What happens to welfare when a monopolist charges different prices to different customers or markets (price discrimination), and what incentive does the monopolist have to offer products of good quality? In the course we also analyse, through various models for imperfect competition, how the order of moves and type of competition affect market outcomes.

Finally, we review selected competition policy topics such as mergers, vertical agreements and collusion, and their effect on the society and customers. We then use the learned theoretical concepts to analyse real-life competition policy cases.

Learning Outcomes

A student who has completed the course should have the following learning outcomes:

Knowledge

The student

• Understand the concept of market power and what harmful effects this has for society and consumers, as well as what incentives companies with market power have.
• Has basic knowledge of competition policy and competition policy instruments.

Skills

The student

• Can use basic game theory to study strategic situations.
• Can use basic oligopoly theory to analyze strategic interaction in markets with imperfect competition.
• Can discuss how mergers, cartels and vertical agreements affect economic efficiency and welfare.
• Can apply the theoretical concepts learned in the course to analyse real-life competition authority case studies.

General competence

The student

• Can analyse real-life situations using theoretical concepts learned in economics and formulate the arguments in a written format
• Can participate constructively in discussions on their own and others' work

Required Previous Knowledge

None

Recommended Previous Knowledge

ECON140, ECON110

Credit Reduction due to Course Overlap

Full overlap with ECON160

Access to the Course

Open

Teaching and learning methods

18 lectures and seminars

Compulsory Assignments and Attendance

A written individual assignment

Forms of Assessment

Portfolio assessment with overall grade assessment.

• Group assignment (40%) (no assessment of individual contribution)
• Individual 2-hour school exam (60%)

Examination Support Material

Calculator: Only the following simple, non-programmable calculators without a graphical display may be used in written tests:

All models of the types:

• Casio FX-82, Casio FX-82ES PLUS or Casio FX-82EX
• Hewlett-Packard HP30
• Texas instruments TI-30

Grading Scale

Graded A-F

Assessment Semester

Assessment in teaching semester. Only students who have a valid document of absence will be entitled to take a new written exam the following semester.

Reading List

The reading list will be ready before 1 June for the autumn semester and 1 December for the spring semester.

Course Evaluation

All courses are evaluated according to UiB's system for quality assurance of education.

Programme Committee

The Programme Commitee is responsible for the content, structure and quality of the study programme and courses.

Course Administrator

The Department of Economics at the Faculty of Social Sciences has det administrative responsibility for the course and the study programme.