If firms are neither monopolists nor price takers in a perfectly competitive world, they face a problem of strategic choice. Their actions influence not only their own payoff but also the payoff of competitors. The course introduces the game-theoretic methods that are used in modern industrial organisation to describe strategic firm behaviour. Participants will become familiar with the core models that analyse optimal strategies of competing firms such as pricing, product design, horizontal and vertical relations and research and development expenditures. Following the development of this analytical framework, the (majority of the) course will focus on the analysis of antitrust (or competition) policy. Students are expected to acquire an in-depth knowledge of international anti-trust institutions and will be able to contribute to a constructive criticism. More specifically, participants will learn how existing antitrust authorities form their decisions and how economic research helps to improve the performance of competition policy.

The first part of the course will cover the core models of imperfect competition used in industrial organisation: after a review of some basic elements of microeconomics, such as monopoly pricing and perfect competition, static quantity and price competition by firms in oligopolistic markets will be covered in detail. However, these are not the only decisions firms must make, and this course will address a number of other dimensions of firm behaviour, including strategic investment decisions and product differentiation.
Following the development of this core analytical toolkit, the majority of the course will focus on the analysis of competition policy: competition policy aims at maintaining or improving competitive interactions in market economies. The course will assess the pro-competitive effects of existing antitrust legislations and will introduce the major developments of the research into industrial economics that help to improve these institutions. To this end, the course introduces empirical methods to determine relevant markets, to analyse market power, and to detect collusive and abusive conduct. On the theoretical side, recent research into the economics of information, R&D and networks is utilized to suggest adjustments of competition policy institutions in the changing economic environment of a globalized world.

This course is open to exchange students conditional they have a major in economics.