AEP-31806 Industrial Organization


Credits 6.00

Teaching methodContact hours
Individual Paper2
Independent study0
Course coordinator(s)dr. D Drabik
Lecturer(s)dr. D Drabik
dr. ir. JHM Peerlings
Examiner(s)dr. ir. JHM Peerlings
dr. D Drabik

Language of instruction:


Assumed knowledge on:

Microeconomics, Mathematics at the level of MAT-14803 Mathematics 1


The central questions addressed by industrial organization are: (i) Is there market power? (ii) How do firms acquire and maintain market power? (iii) What are the implications of market power? (iv) Is there a role for public policy with regard to market power? This course takes a formal approach to analyzing the way firms make production and sales decisions and interact strategically with each other in the marketplace. Whereas microeconomics typically focuses on the extreme cases of monopoly and perfect competition, industrial organization is primarily concerned with the intermediate case of oligopoly, that is, competition between a few firms (more than one, as in monopoly, but not as many as in competitive markets). We will cover selected topics of industrial organization, including price discrimination, oligopoly, collusion and price wars, market structure, horizontal mergers, and vertical relations. We will illustrate these issues by using examples from agriculture and other sectors. Readings in the textbook will provide background and introduction to a variety of topics, many of which will be covered in class in greater depth. Exercises solved in class and problem sets will focus on formal analysis. Supplemental readings will provide additional motivation and opportunities to develop intuition.

Learning outcomes:

After successful completion of this course students are expected to be able to:\\- Reproduce theory on industrial organization;
- solve and interpret the results of quantitative exercises related to the covered topics;
- analyze specific industrial organizational problems;
- understand and explain economic phenomena in the area of industrial organization.


- attending lectures and studying the materials;
- attending practical sessions with analytical exercises;
- writing a research proposal.


- research proposal (The score for the research proposal has to be at least 5/10. The research proposal will count for 35% of the final mark for the course);
- final exam (The score for the final exam has to be at least 5/10. The final exam will count for 65% of the final mark for the course).


Book: Luís M. B. Cabral (2017). Introduction to Industrial Organization (Second edition). The MIT Press, Cambridge, Massachusetts (available in the library and WUR store).
Other study material: Available on Brightspace for this course.

Compulsory for: BEBEconomics and GovernanceBSc2MO