İKT395

School of Economics and Administrative Sciences \ Economics

3

6

Elective

English

İKT 213

Economics

This course, built on the fundamental concepts of microeconomics, introduces students to the field of Industrial Organization, covering its scope and significance. It examines different market structures and the behavior of firms, consumers, and policymakers within these markets, along with their welfare implications. Key topics include monopoly markets, imperfect competition, determinants of market power, cartels and collusion, and competition policies.

Oz Shy (1996), Industrial Organization Theory and Applications, The Massachusetts Institute of Technology Press.
Jean Tirole (1988), The Theory of Industrial Organization, The Massachusetts Institute of Technology Press.

This course aims to introduce students to the field of Industrial Organization and help them to understand both the interactions between different firms and between firms and consumers in various market structures. It focuses on analyzing market structures and the behavior of firms, consumers, and policymakers in those, using mathematical models to develop a deeper understanding of market power and competition policies. Additionally, the course aims to equip students with the skills to analyze the welfare effects of different organizational forms and market practices.

1. Introduces the fundamental concepts of Industrial Organization.
2. Develops the ability to analyze market structures and the interactions between firms and consumers using mathematical models, as well as to assess their welfare effects.
3. Examines real-world market issues such as imperfect competition and cartel formation from the perspectives of firms, consumers, and policymakers, helping students understand market power and competition policies while integrating theory with real-world applications.

Week 1: Introduction and Market Structures: Perfectly Competitive Market
Week 2: Monopoly Market
Week 3: Cartels and Multi-Plant Monopoly
Week 4: Price-Discriminating Monopoly
Week 5: Monopoly Selling Durable Goods
Week 6: Oligopoly Markets: Cournot, Bertrand, and Stackelberg Models
Week 7: Oligopoly Markets: Cournot, Bertrand, and Stackelberg Models
Week 8: Markets for Heterogeneous Products: Linear City Model, Hotelling Model, Circular City Model
Week 9: Markets for Heterogeneous Products: Linear City Model, Hotelling Model, Circular City Model
Week 10: Competition Policies, Market Power: Lerner Index, HHI Index, Concentration Index, Markups. Mergers and Acquisitions
Week 11: Competition Policies, Market Power: Lerner Index, HHI Index, Concentration Index, Markups. Mergers and Acquisitions
Week 12: Research and Development, Quality, Advertising, Demand Estimation Models

• Participation 15 %
• Midterm 45 %
• Final 40 %