Market power is prevalent in most markets. The course "Managerial Economics 2" (previously: Competition Economics) analyzes and discusses (potential) sources of market power that allow firms to charge higher prices compared to the ideal of a perfectly competitive market. In particular, we will deal with concentrated markets (oligopolies), markets with differentiated products, advertising as a channel to increase market power, and markets with information frictions (search models). The lecture is theory-based, but is complemented by recent findings in the empirical literature. We will use the textbook of Paul Belleflamme and Martin Peitz (2010) "Industrial Organization: Markets and Strategies" (mainly Part II and Part III).

The course is closely related to "Regulation and Antitrust, opens in new window", held by Johannes Muthers during the summer term. Both courses complement each other with only minor overlaps. If you plan to attend both courses, doing "Managerial Economics 2" first is probably more intuitive, but not mandatory.

The course (3 ECTS/2 hours) will be held weekly over the entire (winter) semester. Information on the schedule (including the dates of the exams) will be provided at KUSSS, while all course material is available online at Moodle. The course ends with a written examination. Active participation in class is mandatory.