Firms and Markets : Strategic Analysis

Teacher(s)

Gaspart Frédéric;

Language

English
> French-friendly

Prerequisites

micro-economics and introduction to game theory

Main themes

Game Theory and econometrics applied to industrial economics
a) horizontal relationships between producers (Bertrand vs Cournot competition, vertical vs horizontal product differenciation,...)
b) vertical relationships between producers : mergers, intermediaries
c) entry and barriers to entry
d) innovation, changes outside the scope of the firm (e.g. environmental changes)
e) the roles of external actors (the State, consumer collective actions,...)

Learning outcomes

At the end of this learning unit, the student is able to :
1	a. Contribution de l’activité au référentiel AA (AA du programme) 1.1-1.5, 2.1-2.5 industrial organisation (theory and empirics) 3.2-3.4, 3.6-3.8 matching real situations with archetypal problems, solving models and interpreting the abstract results 4.1-4.2 identifying typical problems in complex situations 4.4-4.7 drawing lessons from abstract models for complex, real situations 6.1-6.2 & 6.4-6.7 articles presented by students, homeworks (questions) 5.8, 7.1 & 7.5 competition policy-making b. Formulation spécifique pour cette activité des AA du programme At the end of the course, students will be able : - to read, understand and criticize theoretical and empirical articles in industrial organization in an autonomous way. - to analyze strategic choices made by firms. - to assess the performance of economic activities at the firm level and at the sector level. - to decipher the main stakes of market structure and competition policy on the basis of relevant information about the production activities in a given sector. - to articulate theoretical findings with empirical analyses in industrial organization.

Content

Introductory part, presented by the teacher :

1. Elements of game theory: normal form games, developped form games, equilibrium concepts.
2. Cournot versus Bertrand competition.

Students pick up a series of articles that they will read and present themselves in close association with the teacher. The assistance must subsequently raise two relevant questions on each presentation ; these are answered the next week.
The set of articles in which the students choose covers the following topics :

1. Product differentiation (vertical, horizontal, information asymetries and market failures).
2. Vertical versus Horizontal integration, contract theory, agency (Principal-Agent relationship).
3. Potential competition, excess capacity, entry barriers.
4. Innovation
5. Sectors with intermediaries

Teaching methods

Articles to be read, classes taught in association by students and the teacher, homeworks

Evaluation methods

Homeworks (student talks, critical questions, answers)

Online resources

Moodle

Bibliography

The list of articles in which students choose is constantly evolving.

Faculty or entity

AGRO