INDUSTRIAL ECONOMICS

The course is designed to provide students an introduction to Industrial Organization and to develop abilities to perform case studies and sectoral analysis. Industrial Organization represents the analytical framework for: strategic planning of firms operating in competitive markets; antitrust and competition policy; economic regulation; industrial policy.

This course has no formal prerequisites, but solid background in microeconomics is highly desirable.

Knowledge and understanding: The course aims to provide students with the tools to understand the behaviours of firms, sectors and markets. Students will acquire skills to understand the analytical framework for strategic planning of firms operating in competitive markets from a managerial perspective and to understand micro economics topics such as antitrust and competition policy; economic regulation. Applying knowledge and understanding: At the end of the course, students will be able to understand the foundations of microeconomic underpinning alternative theories of the firm; to connect different theories and apply them to industrial cases and sectoral analyses. The oral exam at the end of the course is intended to assess these competencies. Critical thinking: Students will be able to analyze and autonomously assess firms behaviors and the specifics of the industrial systems Communication skills: Students will acquire the communication skills that allow to discuss the theories of the firms and industrial economics. Such skills and the ability to use technical and economic jargon will be assessed through participation in class, discussion of cases, case study analyses and exams. Learning skills: Students will acquire foundational knowledge in micro economics and management that allow them to deepen their knowledge in advanced micro economic courses.

Production, costs, demand and profit maximization SCP paradigm Vertical integration Eonomies of scale Industrial concentration. Entry barriers Product differentiation and the role of advertising Economy of technological innovation Diversification, mergers and strategic alliances Global Value Chain, Multinationals firms and Foreign Direct Investments The role of industrial policy: a comparison among the EU, US, and China. Italian industry

John Lipczynski, John O. Wilson, John Goddard, Economia industriale. Pearson, 2016, or, alternatively, Carlo Scognamiglio Pasini, Economia Industriale, LUISS University Press, 2012, suggested chapters. Slides of the lectures Other sources gradually uploaded on the Luiss-Learn platform

The exam is based on open-ended questions (80% of the final grade) and the classroom discussion of one or more case studies on topics agreed with the teacher (20% of the final grade). Group presentation (20% of the final grade) Students will have to organize themselves in groups of a maximum of 7/8 participants and work together to present a case study on one of the topics covered in class. They will have to send the slides in advance and prepare the oral presentation, which will last no more than 15 minutes. Who will be in charge of the oral presentation will be drawn at the time of presentation, it being understood that the work will be evaluated for the whole group. The group presentations will all be in attendance and will focus on the second half of the course. Students are invited to comment and discuss the work presented by colleagues. The teachers will also evaluate the presentation on the basis of oral questions to all members of the group. The presentations will be evaluated on the basis of the case chosen, the application of the theories and concepts addressed in class on the practical case, the detail and completeness of the discussion of the case and the implications for the economy and industrial policy. The vote of the presentations cannot be refused, and it will contribute to the final vote for 20%. Exam (80% of the final grade) The written test consists of open-ended questions. Students will be assessed on the basis of: knowledge of the main theories and models indicated in the program (40%), ability to connect the different topics covered (30%), ability to apply the topics studied to examples and cases (20%), ability to use technical-economic terminology appropriately (10%) Failure to achieve a score of 18/30 leads to failure to pass the exam. The correct answer to all open-ended questions, accompanied, where required, by a relevant application of the concepts to the cases and examples proposed, by the development of correct links between the various topics studied and by the use of the appropriate terminology, entails the attribution of a score of 30/30 with the attribution of honors. The sum of the evaluation obtained in the final exam and in the discussion of the case involves the attribution of a score of 30/30 with the attribution of honors. Failure to achieve a score of 18/30 involves, on the contrary, failure to pass the exam.

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Traditional Lectures, seminars and exercise