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Economics
Competition and Economical Regulation

Competition and Economical Regulation

Code	12417
Year	1
Semester	S1
ECTS Credits	6
Workload	OT(15H)/TP(30H)
Scientific area	Economics
Entry requirements	Microeconomics, Game Theory and Industrial Economics.
Mode of delivery	The teaching method is face-to-face, with lectures both theoretical and practical. Accordingly, students are invited to interact with the teacher and with colleagues in the resolution of the proposed exercises. The degree of commitment to these exercises will be taken into consideration in the final evaluation.
Work placements	Not applicable
Learning outcomes	The curricular unit (CU) has as main objectives: - To realize the pertinence of public intervention in markets via competition policy and regulation; - To understand the regulation issues of a natural monopolies and network industries; - To analyze the utilities regulation; - To identify into the markets the need of antitrust policies and to apply regulation measures. At the end of the CU the student should be able to understand the need of public intervention, both from competition and regulation approaches. Students acquire both competition and regulation tools to analyze and intervene in real market situations. The student will be able to comprehend the role of regulatory authorities
Syllabus	1 - Public intervention in a market economy 1.1 Market failures 1.2 Government failures 1.3 Applications 2 - Competition and antitrust policy 2.1 Competitive markets 2.2 Horizontal concentration and vertical integration and market power 2.3 Market power and antitrust 2.4 Antitrust Law 2.5 The market definition and dominant position 3 - Economic regulation 3.1 Principles of Economic Regulation 3.2 The regulatory process 3.3 Regulation authorities 3.4 Theory of regulation 3.5 Capture theory 3.6 Theory of interest groups 3.7 Network industries and access regulation 4 - Natural monopoly regulation 4.1 Regulation of State-Owned Firms 4.2 Franchise bidding 4.3 Cost – of – service regulation 4.4 Rate – of – return regulation 4.5 The Averch – Johnson Model 4.6 Incentive regulation 4.7 Price – caps 4.8 Rate of Return vs Price-Cap 5 - Utilities pricing 5.1 Marginal Cost Pricing 5.2 Ramsey – Boiteux Pricing 5.3 Applications
Main Bibliography	Recommended textbook A - Viscusi, W. K. , Vernon, J. and Harrington, J. (2018). “Economics of Regulation and Antitrust”, 5th ed., MIT Press Other suitable books for the course B - Motta, M. (2009). Competition Policy: theory and practice, 12th printing, Cambridge University Press. B - Church, J. and Ware, R. (2000), Industrial Organization: a strategic approach, McGraw-Hill B - Newberry, D. (2002). Privatization, Restructuring and Regulation of Network Utilities, MIT Press B - Armstrong, M. and Sappington, D. E.M. (2007). "Recent Developments in the Theory of Regulation," Handbook of Industrial Organization, Elsevier
Language	Portuguese. Tutorial support is available in English.