B019170 - COMPETITION AND REGULATION IN THE EU

English

- Industrial organization;
- Competition economics;
- Regulatory economics;
- Competition and regulatory policy;
- Structural reforms in the EU.

-Microeconomics, David Besanko, Ronald Braeutigam. 4th ed. (BB4) selected chapters
- Massimo Motta (2004), Competition Policy, Cambridge University Press: Chapts.1-4;
- Viscusi, Harrington, Vernon, Vickers (2005)‘Economics of Regulation and Antitrust' The MIT Press (chapts. 11, 12, 14, 19)
Further materials of EU institutions or OECD are indicated in the section on extended program.

The aim of the course is to put the students in the position to understand and evaluate the economic rationale of the logic of the competition policies and the most recent reforms of infrastructure, utilities and transport sectors in the EU, throught the lens of the implementation of the Single Market Pillar of the EU.
An abstact knowledge of the theory behing those policies will be complemented with the pratical knowledge of the policies implemented and single cases of reforms will be discussed. Attending students will also apply the conceptual schemes to a practical case of reform or a competition case of their choice. A comparative approach among countries or sectoral reforms will be adopted and they will be ancouraged to express critical evaluation of single reforms in the light of economic theory and evidence. The Case studies for attending students will be the object of a Report/Essay with tight requirements and a presentation in english for the entire class with the objective of strenghtening the comunication and language skills of students.

A thorough knowledge of these policies is essential for anyone willing to work within the EU Commission, a natural target for a graduate in International Relations and EU Studies. Most jobs within EU institutions require and will require in the future as the topic of structural reform becomes pervasive and more revelant in the next EU budget, the extensive knowledge of regulatory and competition policies is an asset for students. Consequently it is a factor of competiveness for students to be complemented with the relevant law and other social sciences, in particular the knowledge of the working of the political and legislative processes within the EU.

Economics. Basics of mathematics.

Most of the course will be taught in the form of standard lectures. Some exercises will be used to illustrate some single important theoretical points. An end-of-course tight essay/report (5-15 pages) complemented by a presentation of groups 1-3 students is required for attending students.


All materials, in particular presentations, exercises text and, later on the course, their solutions, will be posted on the moodle with free access (no password, no limitations) to students of the School.

Programs and materials for attending and non-attending students are the same.

Attending students will be evaluated with two methods:
A report/essay and the correlated presentation (also in small groups) in the final days of the course will account for 1/2 of the final mark. The complexity of the topic chosen the ability to apply theoretical knowledge with critical skills and the quality of the text and the use of technical and appropriate language will be elements of the evalutation along with the content.

The final written examination, composed of a variant of an exercise discussed in the course, a small correlated essay and 5 multiple choice questions on theory or policy, will account for 1/2 of the final mark.

Non-attending students will be evaluated only through the final written examination with the same structure of attending students, without the essay.

Course Outline
1. Background. Introduction to Industrial Organization:
1.1 Mathematics
- [Microeconomics, David Besanko, Ronald Braeutigam. 4th ed. (BB4): Mathematical Appendix pp. 729 - 746 ]

1.2 Elasticity
- [BB4: pp. 43-57]
1.3 Game theory
- [Hal Varian, Intermediate Microeconomics 7th ed. pp 504-546]

1.4 Firm technology and costs
- [BB4: Ch 6.4-6.5 pp. 219-232; 7.1-73 pp. 245-268, 8.1 285-301 ]

1.5 Supply (perfect competitive firm)
- [BB4: Ch 9 pp. 327-376]

1.6 Monopoly
- [BB4: ch. 11.1 11.6, pp. 438-473]

1.7 Monopoly behavior (discrimination, differentiation)
- [BB4: ch 12.1-12.4 pp. 485-502]

1.8 Oligopoly
- [BB4: ch. 13.1 – 13.4 pp. 528-551]

2.Competition Policy
Main text book: Massimo Motta (2004), Competition Policy, Cambridge University Press Chapts. 1-4 (As a general rule advanced material are not required unless otherwise stated)
2.1. Competition Policy in the EU
-Massimo Motta (2004), Competition Policy, Cambridge University Press: Chapt. 1

2.2. Market power and welfare
-Massimo Motta (2004), Competition Policy, Cambridge University Press: Chapt. 2
Note: Advanced Material (shaded): only sect. 2.3.5.2 and 2.4.3.1.

2.3. Market definition
Massimo Motta (2004), Competition Policy, Cambridge University Press: Chapter 3.
Note: Advanced Material: only section 3.3.1.6

2.4. Collusion
-Massimo Motta (2004), Competition Policy, Cambridge University Press: Chapter 4
Note: Advanced material: only section 4.2.5.1.
- 2.5. Mergers. -Massimo Motta (2004), Competition Policy, Cambridge University Press: Chapt. 5

3. Regulation
Main textbook: Viscusi, Harrington, Vernon ‘Economics of Regulation and Antitrust' The MIT Press (Chapts. 11, 12 , 14, 19)

3.1. Natural Monopoly
- Viscusi, Harrington, Vernon ‘Economics of Regulation and Antitrust' The MIT Press (2005, chapter 11);
3.2. RoR and the cost of capital:
-Viscusi, Harrington, Vernon ‘Economics of Regulation and Antitrust' The MIT Press (2005, chap.12)
3.3. Market design and liberalization
- OECD ‘Restructuring utilities for competition pp.1-27 http://www.oecd.org/dataoecd/6/60/19635977.pdf

3.4. Price cap regulation
-Mark Amstrong, Simon Cowan & John Vickers (1994). Regulatory Reform: Economic Analysis and British Experience. MIT Press. Chapter 6.

3.5. Public Firms and Privatization
- Viscusi, Harrington, Vernon, ‘Economics of Regulation and Antitrust' The MIT Press (2005, chapter 14)

3.6. Social regulation, Regulatory Impact Assessment, Administrative Burdens in the EU
- Viscusi, Harrington, Vernon, ‘Economics of Regulation and Antitrust' The MIT Press (2005, chapter 19)
- EU Commission (2009) ‘Guidelines on Impact assessment' http://ec.europa.eu/governance/impact/commission_guidelines/docs/iag_2009_en.pdf
- EU Commission (2009) Annexes to Impact assessment guidelines http://ec.europa.eu/governance/impact/commission_guidelines/docs/iag_2009_annex_en.pdf
- International Standard Cost Model Manual http://www.oecd.org/dataoecd/32/54/34227698.pdf