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Topics in Microeconomics

Topics in Microeconomics

Code	16280
Year	1
Semester	S1
ECTS Credits	6
Workload	TP(30H)
Scientific area	Economics
Entry requirements	The course is based on microeconomic theory. Solid knowledge previously acquired in this area is therefore recommended.
Learning outcomes	The curricular unit (CU) has as main objectives: - To consolidate the knowledge of microeconomics policies on an economy; - 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 understand the importance of information and uncertainty in decision making process; - To Analyze the role of contracts and incentives in the face of moral hazard and adverse selection behaviour of economic agents. At the end of the UC the student should be able to understand the need of public intervention, both from competition and regulation approaches. They acquire competitive and regulatory tools to analyze and intervene in real market situations. Students also understand the importance of information and contract theory in situations of uncertainty.
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 and regulatory capture 3.5 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 5 - Utilities pricing 5.1 Marginal Cost Pricing 5.2 Ramsey – Boiteux Pricing 6- Uncertainty and information 6.1 Contract and incentives theory 6.2 Moral Hazard: 6.3 Adverse Selection 6.4 Signalling e Screening
Main Bibliography	Armstrong, M. and Sappington, D. E.M. (2007). "Recent Developments in the Theory of Regulation," Handbook of Industrial Organization, Elsevier. Belleflamme, P., Peitz, M. (2010) Industrial Organization: Markets and Strategies. Cambridge University. Bolton, P., Dewatripont, M. (2004), Contract Theory, MIT Press. Church, J. and Ware, R. (2000), Industrial Organization: a strategic approach, McGraw-Hill Laffont, J-J, Martimort, D. (2001). The Theory of Incentives: The Principal-Agent Model, Princeton University Press. Motta, M. (2004). Competition Policy: theory and practice, Cambridge University Press. Newberry, D. (2002). Privatization, Restructuring and Regulation of Network Utilities, MIT Press. Rasmusen, E. (2006), Games and Information: An Introduction to Game Theory, Blackwell Publishers, 4th edition. Tirole, J. 1988. The Theory of Industrial Organization, Cambridge, Mass.: MIT Press. Viscusi, W. K., Vernon, J. and Harrington, J. (2005). “Economics of Regulation and Antitrust”
Teaching Methodologies and Assessment Criteria	The teaching method is face-to-face, consisting both of theoretical and practical classes, as well as on tutorials classes. The bibliography supports each one of the issues of the syllabus. The teacher proposes exercises to solve and case studies to discuss. Alongside the technical analysis of the issues, the debate about alternative regulatory policies is pursued. With close monitoring, the student performs, discloses and discusses a research paper. Learning activities include regular office hours, by appointment and by email. For the continuous assessment the weighted average is applied as follows: (i) assessment test, weighted 0.5; (ii) "research paper weighted 0.4; and (iii) quality of involvement in the discussions with weighting 0.1.
Language	Portuguese. Tutorial support is available in English.