INDUSTRIAL ECONOMICS AND POLITICS
Learning outcomes of the course unit
At the end of the course, students will be expected to be able to:
Understand new dynamics about the most classic element of IO: the relationship between the “dimension” and the “concentration” of markets (Knowledge and understanding);
Master the methodological tools used in analysing industrial sectors, using the European Single Market as the natural point of departure (Applying knowledge and understanding);
Understand the changes that business strategies undergo in reaction to new situations of competition (Making judgments);
Interact with corporate executives and policymakers (Communication);
Conduct rigorous empirical analyses on industrial sectors and on groups of enterprises, such as industrial districts and clusters (Lifelong learning skills).
A solid background in Microeconomics.
Course contents summary
Why in our advanced economies do small and medium-sized enterprises (SMEs) coexist with big corporations and multinationals? The main purpose of this Course is to shed light on this issue. First of all, the fundamental principles of Industrial Organization (IO) will be explained in order to better understand “market structures” (e.g., economies of scale, barriers to entry, vertical integration, and market concentration). The subject matter runs from the traditional “Harvard School” IO paradigm (Structure-Conduct-Performance, S-C-P) into the “New” IO: market forces and strategic behaviour (A. Jacquemin) and its evolution into the “sunk costs theory” (J. Sutton). Secondly, the Course will focus on public policies, and in particular on their effects on S-C-P. In so doing, both Competition policy (antitrust, etc.) and the New Industrial Policy will be analysed from a European perspective.
1. The S-C-P (structure-conduct-performance) Paradigm: An Overview
2. The determinants of market structure: economies of scale and M&A
3. Perfect competition
6. Product differentiation and the monopolistic competition
7. Price discrimination
8. Vertical integration
9. R&D and technological innovation
10. Public Policy: Competition policy (antitrust), Industrial policy
D. W. CARLTON, J. M. PERLOFF, Modern Industrial Organization, 4th edition, 2005 (Italian edition, Organizzazione Industriale, edited by M. Beccarello e F. Mosconi, III^ Italian edition, Milan, McGraw-Hill Italia, 2013). A set of “Didactic Materials” will be made available on the ELLY platform for further investigation of some of the topics covered in the textbook (http://elly.gspi.unipr.it/2017/course/view.php?id=82).
First, the lectures of this course will present the contents of the textbook, one of the most widely-used texts worldwide in this field (see the “Testi di riferimento” section above); the instructor of this course was one of the two editors of the Italian edition. The text is divided into 15 chapters (10 topics), each of which illustrates elements of IO theory through the use of numerous case-studies that come from real-world experiences.
Second, alongside the theoretical lectures, the instructor will personally conduct a series of practice sessions designed to shed greater light on the industrial situations in Emilia-Romagna, in Italy, and in Europe.
Finally, the program will be rounded out by a series of seminars with representatives from the economic world (business executives and/or members of various think-tanks).
The slides used during lessons will be uploaded weekly on the ELLY platform. n order to download the slides, students must be registered for the online course.
The slides are considered an integral part of the didactic materials. Students who are not attending lessons should check the available didactic materials and the instructions given by the instructor on the ELLY platform.
Assessment methods and criteria
Applying knowledge and understanding will be evaluated through 2 essay questions (on theoretical arguments that are clearly covered in the textbook), for a maximum of 10 points each.
Communication skills using appropriate technical language will be evaluated through a brief commentary given about a table and/or figure, for a maximum of 3 points.
Independence of opinion and learning skills will be evaluated through the discussion of a case-study on the industrial sectors and enterprises presented in the textbook and/or in the didactic materials (on the instructor's homepage), for a maximum of 7 points.
The written exam will last 1 hour. The written exam is given a score from 0-30. Cum laude recognition will be given to students who have received the maximum score on all items and who have shown mastery of the academic lexicon and precision in their explanation of the subject matter.
The score of the written exam will be published on the ELLY platform within three weeks of the examination.