Economics of Regulation

The main goal of this course is to familiarize doctoral students with the role of the state on markets characterized by "market failure". The subject of analysis is the behavior of individual markets with the emphasis on cost analysis, determinants of market demand, behavior of investors, market power and analysis and effects of regulatory activities of the state.

In this course doctoral students will acquire the necessary knowledge and tools for verification and analysis of market imperfections, historical development, basis and the need of the state regulation of the market. After this course, doctoral students will be able to independently identify market imperfections, analyze them and propose appropriate policies for their correction.

The role of the state. Markets. Market failure. Oligopoly and collusion. The dominant firm and strategic competition. Introduction to economic regulation. Public enterprises. Regulation of natural monopolies. Price analysis and regulation of monopolies. Regulation of vertical markets. Regulation of mergers and antitrust policy. Externalities. "Value" of life. Regulation of environment 1. Regulation of environment 2. Fresh air market. Regulation of the Internet. Regulation of the pharmaceutical market – analysis of patents.

Oral presentation with case studies and critical analysis.

Study research pre-exam paper and taking final oral exam.

Viscusi, W.K., Vernon, J.M. and Harrington, J.E. (2000). Economics of Regulation and Antitrust. 3rd Edition. Cambridge, MA: MIT Press. George, S.J. (1971). The Theory of Economic Regulation. The Bell journal of economics and Management science, Vol 2, NO 1, Peter, D. and Eliana, G. (2009). Quantitative Techniques for Competition and Antitrust Analysis, Princeton University Press. Armstrong, M. and Sappington, D. (2006). Regulation, Competition and Liberalization. Journal of Economic Literature. Armstrong, M. and Sappington, D. (2007). Recent Developments in the Theory of Regulation, in: Armstrong, M. and R. Porter (eds.). Handbook of Industrial Organization, Volume III, Elsevier, Amsterdam. Edenhofer, O., N. Bauer and Kriegler, E. (2005). The Impact of Technological Change on Climate Protection and Welfare: Insights From the Model MIND. Ecological Economics 54: 277‐292.