Industrial organisation is concerned with the use of economic analysis in studying competition between firms and the evolution of market structure. We will focus on understanding the way firms make decisions and the effects of those decisions on market outcomes like prices, quantities, the type of products offered, and social welfare.
Over the past decade, this has been one of the most exciting areas of economics, as a new generation of game-theoretic models have provided us with new ways of analysing a range of practical issues, and addressing some long-standing empirical questions.
The topics covered in this course span a wide range of issues, from predatory pricing to cartel stability, and from the role of non-price competition to the evolution of high technology industries..
Topics covered include the following:
Introduction to Industrial Economics
Monopoly Price Discrimination and Quality Discrimination
Introduction to Game Theory
Dynamic Games: Finite horizon
Differentiated Products Models
Entry Deterrence, Limit Pricing, and Strategic Investment
Dynamic Games: Infinite horizon
Mergers, Vertical Relations
Markets with Asymmetric Information
The theoretical models introduced in the lectures will be applied in classes devoted to case studies of specific industries and to some antitrust court cases.
Readings and class discussions will provide background and introduction to a variety of topics, many of which will be covered in lecture in greater depth. The theoretical models introduced in the lectures will be supplemented with case studies of specific industries. An introduction to Competition Policy issues will also be discussed.
The goals of the course include development of intuition for pricing and other strategic behaviour by firms, and development of skills for analysis of formal models.
It will provide the essential knowledge required to pursue the answer to fundamental questions such as: Why are markets organized the way they are? How do the ways in which a market is organized affect firms' behaviour? How does the behaviour of firms affect the structure of markets and market outcomes?
The course also aims to deliver a higher level understanding of predatory pricing, cartel stability, the role of non-price competition, and the evolution of high technology industries.
World-class LSE teaching
The LSE Department of Economics is one of the biggest and best in the world, with expertise across the full spectrum of mainstream economics. A long-standing commitment to remaining at the cutting edge of developments in the field has ensured the lasting impact of its work on the discipline as a whole.
It is a leading research department, consistently ranked in the top 20 economics departments worldwide. This is reflected in the 2014 Research Assessment exercise which recognised the Department's outstanding contribution to the field
On this three week intensive programme, you will engage with and learn from full-time lecturers from the LSE’s economics faculty.
J. Tirole, The Theory of Industrial Organisation, MIT Press (1988).
J. Church and R. Ware, Industrial Organisation: A Strategic Approach, McGraw-Hill (2000) – Available online for free.
M. Motta, Competition Policy Theory and Practice, Cambridge University Press (2007).
*A more detailed reading list will be supplied prior to the start of the programme
**Course content, faculty and dates may be subject to change without prior notice