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Most markets are not accurately described by the standard perfect competition and monopoly models. Instead, they are characterised by firms strategically interacting with each other. Firms try to increase and protect their market power, and to do so, they diversify their products, build brands, spend on advertising, invest in research & development, apply for patents, acquire competitors and sometimes even resort to illegal strategies such as collusion. Additional challenges (and opportunities for firms!) are presented by markets with asymmetric information (e.g. used cars or health insurance), network effects (e.g. social networks, operating systems) or two-sided platforms (e.g. Amazon, Airbnb).
Industrial Organization (IO) studies the rich set of strategies that firms employ to compete in the market (and for the market!). As such, it gives unique insights into workings of the economy around us, and it has implications for competition economics, market design, innovation policy and many other areas. The objective is to provide students with an understanding of key concepts, models and empirical results within selected IO topics, and make them familiar with modern IO research. This will allow them to read and evaluate applied IO work and provide them with the background required to write a thesis in the field of IO. The students will also take part in a simulation of an antitrust case. This will give them opportunity to apply to acquired knowledge in an exciting applied setting. In order to understand the strategic interaction between firms, the IO relies heavily on the theory of games. The course, thus, also serves as an applied introduction to game theory. In this way, it nicely complements the course Game Theory and Applications, which explores game theory more formally and with many applications from outside of the IO. It can be useful to take both courses in parallel, but it is also absolutely fine to take either of them alone. Last update: Bajgar Matěj, D.Phil. (29.01.2026)
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Components of final grade Your final grade will consist of four parts with the following weights:
Grades ECTS
Home assignments There will be 2 homeworks consisting of a combination of problems, reading summaries and data analysis. You should work out your own homework individually, but feel free to discuss with other students if you are struggling with a particular problem. Homeworks will be uploaded to the course website in the SIS, and you will also submit your answers and have them graded in the SIS. Please submit your homeworks in a pdf format. They should be prepared in text-processing software, with problems involving mathematics typed or written by hand and scanned, whichever you prefer. Homeworks must be uploaded to SIS before midnight of the due date. Late submissions will receive zero points. For questions about the concent of the homeworks (prior to the deadline), contact matej.bajgar@fsv.cuni.cz. For questions regarding the grading of the homeworks (after the deadline), please contact marketa.mala@fsv.cuni.cz. marketa.mala@fsv.cuni.cz Antitrust simulation Teams of students will participate in a simulation of an antitrust case, representing the plaintiff, the defendant and the court. The simulation will take place on 7th May. Important dates (subject to change):
NOTE: No lecture or seminar will take place on 19th March and 2nd April. Last update: Bajgar Matěj, D.Phil. (03.02.2026)
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Primary course textbook Belleflamme, P., and M. Peitz (2nd ed. 2015) Industrial Organization: Markets and Strategies. Cambridge University Press.
Other textbooks Cabral L. M. B. (2000) Introduction to Industrial Organization. MIT Press. Pepall, L., D. Richards and G. Norman (5th ed. 2014) Industrial Organization: Contemporary Theory and Empirical Applications. Blackwell Publishing. Last update: Bajgar Matěj, D.Phil. (09.02.2024)
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Each Thursday morning, there will be two consecutive 80-minute instruction slots. There will typically be no clear separation between lectures and seminars; we will switch flexibly between both types of content. Questions and comments are highly appreciated in the class. You can also ask questions ouside of the class by emailing me at matej.bajgar@fsv.cuni.cz. I am also available for consultations. If you would like to schedule one, send me an email. NOTE: No lecture or seminar will take place on 19th March and 2nd April. Last update: Bajgar Matěj, D.Phil. (29.01.2026)
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The course will cover the following topics. A topic can extend across multiple lectures, and one lecture can cover multiple topics. 1. Introduction to game theory
2. Market power
3. Anti-competitive behaviour
4. Mergers & acquisitions
5. Innovation and intellectual property
6. Information
7. Advertising
8. Network effects
9. Auctions
Last update: Bajgar Matěj, D.Phil. (28.01.2026)
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The course builds on the material of Microeconomics II, in particular the following topics: perfect competition, monopoly, oligopoly. Having successfully taken Microeconomics II (or an equivalent course in intermediate micro at another institution) is a requirement for enrolling in this course. Prerequisities: Microeconomics II Last update: Bajgar Matěj, D.Phil. (09.02.2024)
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