Advanced Micro

Lecturer

Stijn Vanormelingen

Advanced MicroContents

• Introduction to basic concepts and ideas of Industrial Organization (IO)– IO is concerned with how firms compete

• Focus is on markets with imperfect competition– Central concept is market power

» Is there market power?» How do firms acquire and maintain market power?» What are the implications of market power?» Role for public policy regarding market power?

– Difference between Micro and IO• Micro focuses on perfect competition and

monopoly

Advanced MicroContents

Chapter Title Chapter

Introduction & What Is IO? 1

Basic Microeconomics & The Firm 2 & 3

Monopoly And Regulation 5

Perfect (And Almost Perfect) Competition 6

Games and strategy 4

Oligopoly 7

Collusion 8

Market structure and Market power 9

Price Discrimination 10

Vertical Relations 11

Product Differentiation 12

Entry Costs, Market Structure and Welfare 14

Strategic Behavior, Entry and Exit 15

One or two session will focus on exercises.Small changes in the program are possible, depending on how fast we move on.

Advanced MicroApproach

• Weekly lecture– Illustrate and explain most important insights

• CABRAL, L. (2000), Introduction to Industrial Organization, MIT Press

– Where appropriate, by means of practical examples– Additional material available on HUBWise

• Slides, mathematical notes, solutions to exercises

Advanced MicroPrerequisites

• Introductory course in– Micro economics or Managerial Economics– Mathematics for economists

• Simple mathematical skills are required– Solve system of linear equations– 1st and 2nd order derivatives, integrals…– Solve a simple constrained optimization problem

Advanced MicroEvaluation

• Written, closed-book exam– More details will be provided by prof. Vanormelingen

• Purpose• (1) Test insight into and understanding of theoretical

concepts• (2) Test ability to apply theoretical concepts to real world

cases or to stylized examples

Economics of social security and social insurance

Marjan Maes

Aim of the course

• Insight in the functioning, structure and performance of welfare states in OECD countries

• Review the important challenges that these OECD-welfare states face

• Evaluate reforms of social security schemes in terms of efficiency and equity

Course Content: general background

• Definition of the welfare state and social versus private insurance

• Sources of financing welfare states• Typology of welfare states

Course content: examples of specific topics

• Pensions, ageing and early retirement• Health care reform in the US • Unemployment and labour market

policies/institutions • Child/family policies, fertility and female labour

supply • Poverty and income inequality in OECD

countries

Evaluation

• Written closed book exam • 2 hours• Open questions• Examples of exam questions available on

slides

Example question

• The US health system is characterized by low performance although health spending in the US is very high. What are the reasons for this inefficiency? What should the US governement do in order to improve health performance and/or to keep spending moderate? To what extent will this be achieved by the Obamacare health reform?

Exam question

• Demonstrate what are the fundamental parameters that determine the degree of financial sustainability of a PAYG pension system. Explain why nowadays PAYG systems are unsustainable. Wouldn’it be better to switch to fully funded pension system? Why (not)?

Environmental EconomicsAcademic year 2012-2013

Johan Eyckmans

Course objectives• After this course, students should:

– be able answer the question: what is, from a society point of view, the desired level of environmental quality,

– know the most common valuation techniques for non-market goods and services,

– have an insight in the advantages and disadvantages of different environmental policy instruments.

– how profit maximizing businesses should react on specific environmental policy instruments.

Valuation techniques• Valuation of negative externalities of noise

externalities of Brussels airport by means of hedonic price techniques (house sales prices):

Carbon emissions trading

• EU ETS: price formation,fundamentals, future regulatory framework, …

Are we running out of oil?• Hoteling model

1818

p(t)

q(t) e(t)

time

time

T

T

pbackstop 45°

price path

extraction path

S°-S(t) S(t)

Course material• PPT slides:

– HUBwise• Textbook:

– Hanley, N., Shogren, J., and B. White. 2001. Introduction to Environmental Economics. Oxford University Press.

– Through campus bookshop.– 35£ = 40€ at Amazon.co.uk

Exam• WRITTEN and CLOSED BOOK exam.• A number of multiple-choice questions [10pt]

– Require theoretical insight into the subject matter. – Correction for random guessing:

• A number of open questions [10pt]– Testing your capacity to situate current environmental

problems and policy instruments in the course material (recent articles and/or case studies).

– Some questions require basic arithmetic skills.

Public Economics

Contents• Why does a government intervene in the

economy? • And by doing so, can it increase total welfare

of its population?

Public EconomicsApproach• We explain government intervention by means

of economic theory• We refer to real life examples:

• Is Obama’s health care reform a good thing for US citizens?

• What is the role of the government in the financial sector?

• Should a government support the construction of the electrical car?

• At the end of the course, students should be able to provide an answer to such questions that is not only based on “gut feeling”.

Economics of Innovation (Johan Albrecht)

Contents• What is ‘economics of innovation’, why

innovation policy?• Innovation and industrial evolution• Dynamics of innovation in network

economies (economics of QWERTY)• How to organise innovation policy?

Economics of Innovation

Approach• Perspective is macro, policy-oriented (not the

typical management perspective)• Building blocks are first introduced • Innovation dynamics in selected industries

are analysed from an historical perspective (IT, biotech) and later applied in the case of energy technology innovations (renewables)

• ex-cathedra

Culture&

Economies

Some illustrationsConsider this:• In our society some things can beeasily bought (and sold):most goods, even illegal onessuch as cocaine, but alsoeducation and sex• Other things that are often highlyregarded cannot be bought:people, jobs, esteemWhy?

Some illustrationsOr compare these commodities:BMW versus SkodaiPhone versus a mainstream cellRolex versus a 10€ watch

Some goods seem to have a valuethat exceeds its ‘use value’Why?

Some illustrationsAnd finally…• Do the poor always want more socialwelfare provisions and the rich lesstaxes?• Is corruption a cultural or a structuralfeature?• Is becoming an entrepreneur afunction of attitudes and values, orjust an effect of profit opportunities?

ContentsGeneral rationale of the course• Some choices regarding the economyseem attached to ‘culture’ in the broadsense• Economic phenomena are immersedin a web of cultural sense-making andsocial norms• Affects activities (work, consumption,entrepreneurship,...) and structures(markets, firms, government,households)

Approach Interdisciplinary (economics, history,psychology, sociology), but not an ethics class! No maths, wide use of statistical techniques andsome qualitative studies First: theoretical & methodological introduction More active approach after a few weeks:

• One theme per week, preparatory reading• Short lecture, small groups assignment• Presentation, discussion, active contribution• Preparatory reading and presence are

compulsory & checked! Scoring system: ¼ assignments, ¾ exam (case,

concepts, multiple choice)