Topics in Compet Regulation

3 Credits · Level: Graduate, Undergraduate

This course applies microeconomics to analyze government policy towards market power. Regulation controls the pricing or other actions of firms (e.g. entry or exit) in industries where unrestricted competition is viewed as not feasible or not desirable, notably “natural monopolies.” Antitrust or “competition policy” forbids transactions and practices that threaten competition. Currently, the course focuses on antitrust. It examines the three main areas of antitrust concern: mergers, collusion with rivals, and unreasonable exclusion of rivals. We study horizontal mergers, i.e. between competing firms, and vertical mergers, i.e. between firms at different stages of economic activity or, more generally, firms whose products are complements rather than substitutes. For both types of mergers, we analyze why anti-competitive effects or efficiencies can arise. We also address practices that may facilitate collusion (such as certain types of information exchange) or cause unreasonable exclusion (such as exclusive dealing requirements). The theories will be illustrated extensively with case studies from the “real world,” including several in-class mock trials on famous antitrust cases.