Although many developed economies in the world operate based on the principles of free markets, the operation of these markets are legally constrained in order insure that they benefit the consumers in particular and society in general. The Competition Laws that govern the operation of markets are usually enforced and implemented by Competition Authorities(CAs) and ultimately Courts. The reach of competition laws can be classified in four basic categories: horizontal agreements and relationships, vertical agreements and relationships, mergers and acquisitions and abuse of a dominant position. There are related economic theories which provide insights and policy recommendations on each of these categories, mainly developed in the field of Industrial Organization.
This class aims to present the practical application of these theories from Industrial Organization in analyzing policy issues that arise in many different market structures and settings. In doing this, many important and recent cases, in particular from Europe, will be discussed. As it will become clear, there is often a tension between the theories and their application in practice by constructing practicable legal guidelines. The ultimate goal of the course is to make students understand how economic policy can be informed by economic theory and how economic insights can be transformed into practicable policy recommendations. Such an understanding is not only useful for students which have the goal to work for policy making institutions, but also for those which aspire to work in the industry as managers and decision makers as they would understand the legal mechanism and constraints better.
Students taking this class should be familiar with basic concepts in Microeconomics and Game Theory. This background is provided in the courses “Strategie und Wettbewerb I” and Mikroökonomik I and II. It would be ideal if they also have taken a class in Industrial Organization.
There are two textbooks which the lectures will be loosely based on:
- Competition Policy: Theory and Practice, Massimo Motta, 2004, Cambridge University Press,
- Quantitative Techniques for Competition and Antitrust Analysis, P. Davis and E. Garces, Princeton University Press, 2009.
During the course of the semester detailed lecture notes will be provided in the WueCampus site, as well as other material on cases and academic articles. Other relevant sources will be announced as the classes progress. Although the textbooks are not required, it is recommended to obtain a copy of them.
In addition, a freely available book on Industrial Organization can serve as a reference for the tools that we will employ in this class:
Jeffrey Church and Roger Ware. (2000), Industrial organization : a strategic approach. Boston: Irwin/McGraw-Hill.
It can be downloaded at http://works.bepress.com/jeffrey_church/23/