INDUSTRIAL ORGANIZATION AND ECONOMICS OF INNOVATION

Single discipline educational activity

Course Sheet

Course code:

A004017

Academic Year of enrolment:

2019/2020

Academic Year of provision:

2019/2020

Degree:

Master's Degree Programme in MANAGEMENT ENGINEERING

Language:

Italian

Grouping:

INDUSTRIAL ECONOMICS
Credits: 6 - Related/Supplementary
ECONOMICS OF INNOVATION
Credits: 3 - Related/Supplementary

Grouping credits:

Grouping type:

Attendance grouping

Programme Year:

Cycle:

Second semester

The frequency of the courses Micro and macroeconomics and Organisation and management of innovation is suggested in order to properly follow these lectures

Educational Goals

The course is a mandatory subject and refers to the complementary educational activities in the Economics and Management study plan of engineering. The main educational objective of this course is to acquire the basic knowledge and competence that allow students to understand theoretical models that control the relationship among firms and industry. At the end of the course, students will be able to better analyze, interpret, and discuss the mechanisms that regulate the real relationships among industries and among firms belonging to the same industry. Particular attention is paid to antitrust (ex ante and ex post).

In particular:
1) Knowledge and understanding: Knowledge of market competition theories with respect to classic models.Understanding of the behavior of microeconomic agents, with particular reference to firm theory.
2) Applying knowledge and understanding: Ability to perform a microeconomic analysis of the demand and supply of goods and services; to compare critically the theories of the firm. Ability to analyse the economic behavior of firms through game theory. Ability to use available information in order to apply and understand the operative implications of competition and industrial policy theories.
3) Making judgments: Ability to recognize the theoretical models that describe real situations and in particular that determine both the
relationships among firms within an industry and the strategies that each firm can adopt.
4) Communication skills: Ability to expose (both oral and written) the obtained competencies using appropriate vocabulary coherent with the discipline.
5) Learning skills: Ability to understand theoretical models using the basic instruments learned during the course
6) develop the skills needed to analyze, model, interpret increasingly complex and voluminous data sets

Content

The course will cover the following topics of industrial economics and economics of innovation
INDUSTRIAL ECONOMICS
- Definition of firm as black box and family firm
- Market structure and market power
- Price distrimination of 1st, 2nd and 3rd degree
- Product variety and quality in monopoly
- Oligopolistic competition: Cournot, Bertrand and Stackelberg
- Innovation and R&D
- Collusion
- Antitrust
- Data science
ECONOMICS OF INNOVATION
- Basic concept and definition
- The economic of intellectual property right
- Fifty years of empirical studies of innovative activities and performance
- Socioeconomic dynamics in the era of artificial intelligence and robotization

Extended Syllabus

DETAILED PROGRAM
INDUSTRIAL ECONOMICS
1. What is the industrial economy? / An example / The fundamental problems of the industrial economy /
2. Microeconomics Reclamation / Demand / Costs / Profit maximization / Efficiency
3.The company / companies maximize profits' / What determines the boundaries of the enterprise '/ Because the companies are different'/ Family business
4.Games and strategies / Dominant strategies, dominated strategies and Nash equilibrium / Dynamic games: irreversible choices and backward induction / Repeat games ·
5. Monopoly and regulation / Monopoly / Regulation / Essential means of production and access fees
6. Perfect (or almost perfect) competition / Perfect competition / From theory to stylized facts / Competitive selection / Monopolistic competition / A look forward ·
7. Oligopolistic Competition / Bertrand's Model / Capacity Constraints / The Cournot / Bertrand and Cournot Model Compared / Comparative Static 8.Collusion / Repeated Interaction and Stability of Collusive Agreements / Price Wars / Factors That Help Collusion / Antitrust policy
9.Structure and market power / Concentration and market power: theory / Concentration and market power: empirical estimates / Conduct and market power: empirical estimates
10. Price discrimination / Methods of price discrimination / Third-degree price discrimination / Non-linear prices / Categorization, combination of goods and other forms of consumer selection / Price discrimination is legal 'It should be'
11. Vertical relationships / Double marginalization and two-stage tariff / Competition between retailers / Externality / Indirect control / Competition between producers / Vertical restraints and antitrust policy
12. Product differentiation / horizontal differentiation, vertical differentiation and characteristics approach / Product differentiation and market power / Product positioning / Imperfect information and switching costs
13. Advertising / Information, persuasion and reporting / The intensity of advertising / Competition in prices and advertising
14. Entry costs, market structure and well-being / Entry costs and market structure / Endogenous and exogenous entry costs / Freedom of entry and social well-being
15. Entry, Exit and Strategic Behavior / Entry Deterrence / Predation / Mergers and Acquisitions
16. Research and Development / Market Structure and Incentives to Invest in Research and Development / Competition Dynamics in Research and Development / Technology Policy
17. Networks and standards / Consumer expectations and critical mass / Path dependence / Inertia or excessive mobility / Compatibility / Public intervention
18. Data science
ECONOMICS OF INNOVATION
1. Basic concept and definition: the economics of technical changes, economic growth, industrial dynamics, economic policy, from invention to innovation, S-T interaction
2. The economic of intellectual property right: problem of appropriability, patents, copyrights, trademarks, patents explosion
3. Fifty years of empirical studies of innovative activities and performance: firm size and innovation, monopoly and innovation, market structure and innovation, firm level determinants
4. Socioeconomic dynamics in the era of artificial intelligence and robotization: short history of AI, AI real world application, AI and labour, AI in business practice, global race for AI dominance

Recommended Bibliography

Industrial Organization, Cabral, MIT Press

Game theory with applications to economics, Friedman, New York: Oxford university press, 1986

Easy: James, G., Witten, D., Hastie, T., & Tibshirani, R. (2013). An introduction to statistical learning (Vol. 112, p. 18). New York: Springer.

Advanced: Friedman, J., Hastie, T., & Tibshirani, R. (2009). The elements of statistical learning: data mining, inference, and prediction. New York: Springer.

Economia dell'innovazione. Franco Malerba 2000
Carocci Editore

Methods of Provision

Conventional

Teaching Methods

The teaching instruments are:
- Frontal lectures
- Real case studies from antitrust documents
- Oral presentation and discussion from students
- Seminars and round table
- Speech from expert on specific theme
- Debating

Assessment Methods

The exam is aimed at ascertaining the knowledge of the topics listed in the official Program of the Course and the ability to apply the theory and its methods to the understanding and attempt to solve complex real cases.

Different evaluation methods are provided for attending and non-attending students.

ATTENDING STUDENTS
INDUSTRIAL ECONOMICS
For each member, the exam consists of a written part and a mandatory oral part. The evaluations of the writings and the oral ones are expressed in thirtieths. The final grade is determined taking into account both the written (70% of the final exam) and oral tests (30% of the final exam).
WRITTEN PART: a vote of less than 16/30 is considered not sufficient. During the writing, books of any kind or course notes can not be brought to the classroom. The written exam is made of two parts, aimed at ascertaining the ability of understanding and argumentation of real cases concerning the topics covered in the course and at verifying the competences concerning data science. The first part of script consists of an extended question while the second one consists of two questions (i.e. a theoretical one and an interpretation of an econometric model).
ORAL PRESENTATION: The oral exam is considered sufficient with a score of at least 18/30. The oral will mainly be aimed at ascertaining an adequate knowledge of the theory discussed in the course and may include the discussion of the written and of the laboratory activity. The theory topics discussed during the course are listed in the Course Program. The individual evaluation criteria are: content, language properties, clarity of exposition, ability to summarize the topic, professional communication skills (key words, sequentiality, clarity), links developed.
FINAL EVALUATION: To pass the exam, the final grade, which takes into account the marks of the written and oral, must be greater than or equal to 18/30. Written part 70% and Oral part 30%
ECONOMICS OF INNOVATION
ATTENDING STUDENTS
Oral presentation of selected scientific papers
FINAL EVALUATION: weighted average

NOT ATTENDING STUDENTS
INDUSTRIAL ECONOMICS
For each students, the exam consists of two written part: one in class one at home. The evaluations of the writings are expressed in thirtieths.
WRITTEN PART CLASSROOM: During the writing part in classroom, books of any kind or course notes can not be brought to the classroom. The written exam is made of two parts, aimed at ascertaining the ability of understanding and argumentation of real cases concerning the topics covered in the course and at verifying the competences concerning data science.
WRITTEN PART AT HOME: The paper written at home will be a deepening of a real case previously assigned. The evaluation criteria are the following: content, ability to comprehensively summarize the topic, developed links.
FINAL EVALUATION: To pass the exam the final grade, which takes into account the votes of the two parties (respectively 70% and 30%), must in any case be greater than or equal to 18/30
ECONOMICS OF INNOVATION
Oral presentation of selected scientific paper
FINAL EVALUATION: weighted average

Assessment:

Final Mark

Programme of Educational Activities

Start date of teaching period:

Monday, February 17, 2020

End date of teaching period:

Friday, June 5, 2020

Other Information

Course contents will be update every academic year and further readings, especially business and real cases, could be eventually provided during lectures and posted on the webpage dedicated to the course.

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