Faculty
Anette Boom

Course Coordinator
Anette Boom

Static and dynamic games, monopolistic competition, oligopoly, collusion, empirical estimation of market power, price discrimination, vertical relations, vertical and horizontal mergers, product differentiation, advertising, entry and exit of firms.

This course analyses different relationships between the firm, its competitors, its suppliers and its customers. How to price the firm’s products in markets with varying fierceness of competition and how to use non-pricing strategies like, for example, product differentiation in more or less competitive situations are all topics that are discussed in the course. The scope for and the effect of price discrimination is investigated. Practicable means of extracting profits from customers are analysed, including franchise fees, royalties and vertical re­straints. Similarly pricing vis-à-vis suppliers is analysed as are motives for vertical and horizontal mergers. Finally, dynamic aspects of competition, entry, exit and strategic responses to these events are also part of the course. In addition game theoretic concepts are introduced to the students in order to supply them with working tools to analyse strategic situations in a more thorough analytical way.

The importance of the course to students derives from the fact that the price is one of the most important decision variables for a firm. A deep understanding of how different modes of competition affect firm’s opti­mal pricing strategy is thus indispensable knowledge to the astute analyst. In addition future managers should understand how they influence the mode of competition via, for example, product positioning, or in­vestments in capacities. Further, suppliers of primary inputs, intermediate products, manufacturers, whole­sale distributors and retailers need to understand the nature of their vertical relations in order to optimise their supplier-customer relationships

Lectures and discussions in class, exercises.