Subject: Industrial Economics

Scientific Area:



80 Hours

Number of ECTS:

7,5 ECTS



Overall objectives:

1 - To know and to understand the theoretical foundations of industrial economics.
2 - Be able to identify the main characteristics of market structures, namely the markets of imperfect competition.
3 - Understand the determinants of market structures and their relation with firms'  behavior.
4 - Be able to analyze the implications of market structures in terms of welfare.
5 - Have specific knowledge and sufficient critical skills to analyze the different  orientations in terms of public policies;
6 - Develop critical thinking skills and the ability to make quantitative analyses of problems of industrial organization.


1 - The theoretical foundations of Industrial Economics.
2 - Market Structures: definition of market; measures of concentration; empirical analysis of concentration; theories of concentration. 
3 - Oligopoly Theory and Games: dominant firm with a competitive fringe; the Cournot model; the Bertrand model; the Stackelberg leader­-follower model; cartels; game theory.
4 - Barriers to Entry: definitions of Barriers to Entry; the theory of Contestable Markets; the sources of Barriers to Entry; strategic behavior to prevent entry.
5 - Product Differentiation: horizontal and vertical differentiation; the representative  consumer model; location models; advertising and differentiation.
6 - Innovation: classification of innovations; effects of innovations on welfare; Market  Structure and the incentive to innovate; the size of firms and innovation;  Technological Regimes; diffusion of innovation. 
7 - Vertical Integration and Diversification. 
8 - Public Policies.


S. Martin , 1994 , Industrial Economics: Economic Analysis and Public Policy , Macmillan
J Tirole , 1988 , The Theory of Industrial Organization , MIT Press
M. Motta , 2004 , Competition Policy: Theory and Practice , Cambridge University Press
D. Carlton, J. Perloff , 2005 , Modern Industrial Oorganization , Harper Collins
L. Cabral , 1994 , Economia Industrial , McGraw-Hill

Assesssment methods and criteria:

Classification Type: Quantitativa (0-20)

Evaluation Methodology:
In the lectures, the teaching methodology is basically the oral exposition supported by PowerPoint and/or lecture notes. In the tutorials, the teaching methodology is based  on problem solving, discussion of real world case studies and presentation of works  prepared by students. Teaching material includes textbooks, scientific articles, media  and internet material and documents prepared by the teacher. Evaluation consists of  an intermediate examination with a weight of 50% of the final mark and a final examination with a weight of 50% of the final mark. To pass the module, the student  needs to achieve a minimum average of 10 out of 20. Time of resource / improvement: If the student is not approved in the normal time or intends to improve his / her evaluation, he / she should take an overall examination with the weight of 100%