Graduate Summer School 2005
Course description
This course is topical and covers both theoretical and new empirical industrial organization models. The following is a non-exhaustive list of topics that will be covered:
- Competition in Two-sided Markets (Platforms)
- Competition against and between Bundles
- Competition between Complement Platforms
- Competition between Networks
- Empirical approaches to Market Definition
- Market Definition and Product Differentiation
- Mergers and Simulation Analysis
- Vertical Agreements: the Car Market
In addition, if time is available, the following topics will be added:
- Price-Cost Margins avoiding Cost Data
- Empirical analysis in Cartel Cases
In class, we will try not only to achieve a balance between theory and empirical research, but also between analysis of models and application to actual antitrust cases.
Articles will be used in group discussions/presentations. After having lectured on a substantial subset of the articles, participants can be assigned to cases, and asked to present the arguments. Not the “raw” cases, but rather the discussion of them in the literature will be discussed, and time will be taken out to work through the material. These readings are marked in the list below, with “Case” up front the reference. Click here for the readings.
Lectures are self-contained and only draw upon specific references (see list below) which, if studied in further detail, can be used also as further reading.
Target audience
Participants normally have followed the ENCORE principles and intermediate lecture series or equivalent. This implies familiarity with non-cooperative game theory and oligopoly models. The material participants should master is covered by Forges F. and J.-F. Thisse, Game Theory and Industrial Economics: An Introduction, in G. Norman and M. La Manna, 1992, The New Industrial Economics, Edward Elgar and Foundations of Oligopoly Theory I, II and III, respectively Chapters 2,3 and 4 of S. Martin, 2002, Advanced Industrial Economics, 2nd. Edition, Blackwell.
Instructors
Literature
A compilation of articles will be used for the Graduate School (see below). Michael D. Whinston, Lectures on Antitrust Economics, downloadable from www.csio.northwestern.edu is also an excellent text to read, covering many issues we will focus on.
For Competition in Two-sided Markets (Platforms):
- Jean-Charles Rochet and Jean Tirole, 2003, Platform Competition in Two-sided Markets, Journal of the European Economic Association, vol.1, issue 4, pp. 990-1029
- Marc Armstrong, 2004, Two-Sided Markets: Economic Theory and Policy Implications, prepared for the ENCORE workshop on competition issues in two sided markets, The Hague, October 28, 2004, mimeo, 15p.
- Case: David Evans, 2003, The Antitrust Economics of Multi-Side Platform Markets, Yale Journal on Regulation, vol.20,nr 2,pp.325-82
For Competition against and between Bundles:
- Barry Nalebuff, 2000, Competing against Bundles, Yale School of Management Working Paper 7, downloadable from: http://papers.ssrn.com/paper.taf?abstract_id=239684
- Case: Barry Nalebuff, 2004, Bundling:GE-Honeywell (2001), in Kwoka J. And L. White, The Antitrust Revolution, Economics, Competition and Policy, 4th Edition, Oxford UP.
- Case: Jean Tirole, 2004, The Analysis of Tying Cases: A Primer. ACE-Conference, Siena, November 18,2004, 21p.
For Competition between Complement Platforms:
- Patrick Van Cayseele, 2005, Complementary Platforms: The Provision of Custody for Internationally Diversified Investors, mimeo, Center for Economic Studies, KULeuven, 20p.
- Case: Deutsche Börse Group, 2005, The European Post-trade Market, An Introduction. White Paper, 40p. , downloadable from: www.deutsche-boerse.com
For Competition between Networks:
- Jean-Jaques Laffont, Patrick Rey and Jean Tirole, 1998, Network Competition : I, Overview and Nondiscriminatory Pricing, Rand Journal of Economics, vol.29 no. 1, pp. 1-38 or
- Marc Rysman, 2004, Competition Between Networks: A Study of the Market for Yellow Pages, Review of Economic Studies, vol. 71, pp. 483-512 (depending on the interest of the participants, this topic might be swapped with Price-Cost Margins avoiding Cost Data, the topic has no case or “Case” linked to it).
(If time allows, both topics may be covered)
For Empirical approaches to Market Definition:
- Besides many sources, an interesting departure is Critical Loss: Let’s Tell the Whole Story with, Michael L. Katz, Antitrust Magazine, 2003
For Market Definition and Product Differentiation:
- Steve Berry, 1994, Estimating Discrete Choice Models of Product Differentiation, Rand journal of Economics, vol.25 no 2, pp. 242-262
For Vertical Agreements: the Car Market:
- Case: Randy Brenkers and Frank Verboven, 2004, Market Definition with Differentiated Products-Lessons from the Car Market. Mimeo, KULeuven, 36p. Also information at: http://europa.eu.int/comm/competition/index_en.html
For Mergers and Simulation Analysis:
- Jerry Hausman, G. Leonard and J. Zona, 1994, Competitive Analysis with Differentiated Products, Annales D’Economie et de Statistique, vol. 34, pp. 159-180
- Aviv Nevo, 2000, Mergers with Differentiated Products: The Case of the Ready-to-Eat Cereal Industry, Rand Journal of Economics, vol. 31, pp. 395-421.
- Case: Marc Ivaldi and Frank Verboven, 2005, Quantifying the Effects of Horizontal Mergers in competition Policy, International Journal of Industrial Organisation, forthcoming. Also information on the Commission’s decision at http://europa.eu.int/comm/competition/index_en.html
In addition, if time is available, the following topics will be added:
- Price-Cost Margins avoiding Cost Data ( may be swapped with Competition between Networks ). We will cover: Steve Martin, 2002, Avoiding Cost Data II: the Solow Residual, section 7.5.6: Roeger, in S. Martin, 2002, Advanced Industrial Economics, 2nd. Edition, Blackwell
- Jozef Konings, Patrick Van Cayseele and Frederic Warzynski, 2001, The Dynamics of Industrial Markups in two small open Economies: does National competition Policy Matter, International Journal of Industrial Organisation, vol. 19, pp. 841-859
- Jozef Konings, Patrick Van Cayseele and Frederic Warzynski, 2005, The Effects of Privatization on competitive Pressure on Firms’ Price Cost Margins: Micro Evidence from Emerging Economies, Review of Economics and statistics, Vol. 80 , pp.368-390
Empirical analysis in Cartel Cases
- David Genesove and Wallace Mullin, 2001, Rules, Communication, and Collusion: Narrative Evidence from the Sugar Institute Case, American Economic Review, vol. 91, pp. 379-398
Date
Monday 18 - Friday 22 July 2005.
Venue
University of Amsterdam (Roetersstraat 11, Amsterdam)
Registration fee
The registration fee is € 1250,- per participant. This includes teaching materials (the syllabus, prints of power point presentations, a writing case), beverages, lunches and dinners.
A reduced fee is offered to PhD students.
