The Course uses the fundamental concepts in industrial economics in order to discuss optimal antitrust and regulatory policies. This theoretical foundations are then used to evaluate the structural reforms and the so called ‘better regulation’ policies taking place at EU level
Massimo Motta (2004), Competition Policy, Cambridge University Press: Chapts.1-4, e 8
Viscusi, Harrington, Vernon, Vickers (2005)‘Economics of Regulation and Antitrust’ The MIT Press (chapts. 10, 11, 12, 14, 19)
Learning Objectives
The course will enable the students to evaluate the economic impact of competition and regulation policies at national and EU level.
Prerequisites
Microeconomics
Teaching Methods
Lectures and revisions
Type of Assessment
Written examination with essays, excercises and multiple choice questions
Course program
Regulatory and pro-competitive policies have in recent years become increasingly important in the EU strategy. The achievement of a single market has been fundamental and in many ways, the centrepiece, from the economic point of view, of the European Union. The deregulatory and liberalization processes ongoing in most European countries have been pushed and harmonized by European Directives. On the other side the EU Institutions (both the EU Commission and the ECB) have repeatedly asserted the centrality of structural reforms for both the viability of the budgetary adjustment and the stability of the Monetary Union.
The Course uses the fundamental concepts in industrial economics in order to discuss optimal antitrust and regulatory policies. This theoretical foundations are then used to evaluate the structural reforms and the so called ‘better regulation’ policies taking place at EU level. Some recent reforms in utilities and infrastructure industries (rail services, natural gas and electricity), and/or comparative indicators of regulatory quality and structural reforms of the main international Institutions (the OECD PMR and the Doing Business of the World Bank) could be the objects of a group project within the course.
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.
Syllabus
1. Background: Introduction on IO
Oligopoly, monopoly, competition
-Massimo Motta (2004), Competition Policy, Cambridge University Press: Chapt. 8
-Any of the following two books on IO covers the same material
Dennis Carlton & Jeffrey Perloff (2005). Modern Industrial Organization. Pearson.
Cabral, L. ‘Introduction to Industrial organization’ The MIT Press
2.Competition Policy
Competition Policy in the EU
-Massimo Motta (2004), Competition Policy, Cambridge University Press: Chapt. 1
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.
Market definition:
Massimo Motta (2004), Competition Policy, Cambridge University Press: Chapter 3.
Note: Advanced Material: only section 3.3.1.6
Collusion
-Massimo Motta (2004), Competition Policy, Cambridge University Press: Chapter 4
Note: Advanced material: only section 4.2.5.1.
3. Regulation
Economic Theories of Regulation
- Viscusi, Harrington, Vernon ‘Economics of Regulation and Antitrust’ The MIT Press (2005, chapter 10);
Natural Monopoly
- Viscusi, Harrington, Vernon ‘Economics of Regulation and Antitrust’ The MIT Press (2005, chapter 11); OECD ‘Restructuring utilities for competition pp.1-27
http://www.oecd.org/dataoecd/6/60/19635977.pdf
RoR and the cost of capital:
-Viscusi, Harrington, Vernon ‘Economics of Regulation and Antitrust’ The MIT Press (2005, chap.12)
Grout Jenkins-Zalewska, and Grout Zaleska CMPO WP, 2001
OECD ‘Restructuring utilities for competition pp.1-27 http://www.oecd.org/dataoecd/6/60/19635977.pdf
Price cap regulation
-Mark Amstrong, Simon Cowan & John Vickers (1994). Regulatory Reform: Economic Analysis and British Experience. MIT Press. Chapter 6.
Public Firms and Privatization
- Viscusi, Harrington, Vernon, ‘Economics of Regulation and Antitrust’ The MIT Press (2005, chapter 14)
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