Competition Policy and Economic Regulation

Code:

2ECON27

Acronym:

CPERS

Keywords
Classification	Keyword
CNAEF	Economics

Instance: 2020/2021 - 2S

Active?	Yes
Course/CS Responsible:	Master in Economics

Cycles of Study/Courses

Acronym	No. of Students	Study Plan	Curricular Years	Credits UCN	Credits ECTS	Contact hours	Total Time
ME	16	Bologna Syllabus	1	-	7,5	56	202,5

Teaching language

English

Objectives

This course aims at investigating the main economic issues on competition policy and economic regulation, applying theoretical and empirical industrial organization models.

In the first part, the course analyzes and evaluates important topics for competition policy such as the concept of relevant market, collusion and mergers, with applications to recent cases decided by worldwide competition authorities.

In the second part, the course addresses the major changes in regulatory policy, which have led to the privatization of a number of state-owned monopoly industries and the introduction of competition. The course intends to be a primary source of information for students regarding modern regulatory instruments, such as price cap, yardstick regulation and access pricing.

Learning outcomes and competences

In the end of the course, students should be able to (i) understand the foundations of competition policy and economic regulation; (ii) create simple models that evaluate competition policy interventions; (iii) evaluate the results of regulatory agencies’ decisions; (iv) analyze, critically discuss and compare competition policies and regulatory activity implemented in practice, worldwide.

Working method

Presencial

Pre-requirements (prior knowledge) and co-requirements (common knowledge)

Microeconomics. Industrial Organization.

Program

I. Competition Policy

1. Competition Policy: History, Objetives and the Law.

2. Market Power and Welfare.

3. Market Definition and the Assessment of Market Power.

4. Collusion and Horizontal Agreements.

5. Horizontal Mergers.

6. Vertical mergers and vertical restraints.



II. Economic Regulation 

1. What is Economic Regulation? An introduction.

2. Regulation of Natural Monopoly: Ramsey pricing.

3. Rate of return regulation.

4. Incentive regulation: Price cap, Yardstick regulation.

5. Regulation in network industries. Access pricing. Interconnection.

6. Sector regulation: Electricity, Natural gas, Telecommunications, Transports, Water.

Mandatory literature

Motta, Massimo; Competition policy. ISBN: 978-0-521-01691-9
Viscusi, W. Kip; Economics of regulation and antitrust. ISBN: 0-262-22049-0
Church, J. and Ware, R. ; Industrial Organization - A Strategic Approach, McGrawHill, 2000

Complementary Bibliography

Belleflamme, Paul; Industrial organization. ISBN: 978-0-521-68159-9

Comments from the literature

Scientific articles will be indicated during the course.

Teaching methods and learning activities

The course relies on a hybrid teaching methodology. We combine the theoretical exposition of the program contents with the presentation and the discussion of real cases. Students’ participation in class is highly encouraged, both in terms of (i) commenting the empirical evidence and theoretical models exposed in class; and (ii) solving questions presented in classes (course works).

Evaluation Type

Distributed evaluation with final exam

Assessment Components

Designation	Weight (%)
Exame	50,00
Trabalho escrito	50,00
Total:	100,00

Amount of time allocated to each course unit

Designation	Time (hours)
Estudo autónomo	90,50
Frequência das aulas	56,00
Trabalho escrito	56,00
Total:	202,50

Eligibility for exams

Students will be assessed by the resolution of course works (50% of the final grade) and by an exam (50%). Students can do the exam at 22 June 2021 or 15 July 2021.  Exam minimum grade: 7 (Scale 0 – 20). To conclude the course it is mandatory to do the course works and the exam.

There may be an additional oral test to defend the classification obtained in the written exam.

Calculation formula of final grade

Students will be assessed by the resolution of course works (50% of the final grade) and by an exam (50%). Students can do the exam at 22 June 2021 or 15 July 2021.  Exam minimum grade: 7 (Scale 0 – 20). To conclude the course it is mandatory to do the course works and the exam.

There may be an additional oral test to defend the classification obtained in the written exam.