Learning outcomes:

Scope: The study and understanding of strategic behavior of firms in oligopoly status and monopolistic competition.

Aim: Industrial Orgasniation aims to familiarize the students of the Department of Economics with the strategic behavior of firms in oligopoly status and monopolistic competition and micro-economic policy, the principles of regulatory policy and competition policy.


  • Code :             X63
  • Semester :     7th
  • Effort :              7.5 ECTS
  • Hours :             3 per week
  • Type :                Economics
  • Department : Economics
  • Exams :             Yes

Course Contents:

Market forms : oligopoly and monopolistic competition : Strategic behavior . Introduction to game theory - the decision analysis in strategic situations . Decision trees and game trees . Games in strategic and extensive form. Major strategies and the prisoner's dilemma . Nash equilibrium. Mixed strategies. Multiplicity and effectively balances. Credible threats and balances perfect in sub-game . Repeated games . Games with incomplete ( asymmetric ) information. Reputation and strategic behavior . Pricing in oligopoly with homogeneous products - Cournot - Nash and Bertrand – Nash models. Solutions to the Bertrand paradox. The von Stackelberg ( leader - following undertakings ) oligopoly with differentiated products model - Hotelling and Chamberlin type models. Monopolistic Competition . Markets and Pricing inputs : Maximizing profit and demand inputs. Comparative statics. Marginal productivity analysis and identification of units involved. Monopsony . Monopoly power in the supply rates. Labour. Capital and return on capital . Demand for capital by firms . Optimal allocation of resources over time . Market failures : Basic causes of market failure , monopoly power . Externalities and allocative inefficiency, Solutions to the problem of externalities , public goods - characteristics and resource allocation with public goods , incomplete ( asymmetric ) information - moral hazard and adverse selection , Micro - Economic Policy, regulatory principles and competition policy .