Econometrics of competition 2400-ENSM110B

This course aims to equip students with the analytical tools needed to conduct quantitative economic assessments in the context of competition policy and regulatory analysis. It introduces key empirical techniques used to study market behavior and assess competition, drawing on real-world data and examples from selected industries.

The course combines theoretical instruction with practical application. Lectures will be complemented by hands-on sessions using real industry datasets to perform econometric analyses in R. Students will also complete regular homework assignments to independently apply the empirical methods covered in class.

The course is structured around selected academic papers, which serve as a foundation for understanding the theoretical concepts and their application to actual competition and regulatory cases.

By the end of the course, you will be able to:
• Understand and apply key quantitative techniques used in competition and regulatory economics.
• Analyze market structures and conduct, including market definition, demand estimation, and market power assessment.
• Estimate demand systems for both homogeneous and differentiated products.
• Perform merger simulations and calculate damages in antitrust cases.
• Interpret and critically evaluate empirical findings across different methodological approaches.
• Assess the advantages and limitations of various techniques and determine their suitability in different contexts.
• Identify and understand the data requirements for the application of each method.
• Gain practical insights from recent cases where quantitative tools were used in regulatory and competition proceedings.
The course is structured around a mix of lectures and practical tutorials using the R programming language. Students will explore key studies, apply econometric models to actual market data, and carry out exercises that simulate the analysis used by regulators and competition authorities.

Course Topics:
• Oligopolistic Competition Refresher
A review of core models of market competition, including Cournot quantity competition, Bertrand price competition, and price competition with product differentiation.
• Estimating Demand for Homogeneous Goods
Simultaneous estimation of demand and supply functions in markets with homogenous products.
• Identifying Conduct and Collusion
How to identify market conduct parameters and infer collusion from market data, including discussion of seminal empirical work.
• Product Differentiation and Discrete Choice Models
Modeling demand for differentiated products using discrete choice frameworks including multinomial logit and nested logit models.
• Market Structure and Entry
Empirical analysis of entry decisions and market structure based on the Bresnahan-Reiss framework, with applications to telecom markets.
• Merger Analysis
Quantitative methods for assessing mergers, including diversion ratios, the SSNIP test, upward pricing pressure (UPP), and merger simulation techniques.

Tutorials and Practical Workshops:
Three hands-on sessions in R are dedicated to:
• Estimating demand and detecting collusion in homogeneous goods markets
• Estimating demand for differentiated products
• Merger simulation and market power analysis

Each practical component is tied to graded empirical exercises based on real case studies and academic papers.

Szacunkowy nakład pracy studenta: 4ECTS x 25h = 100h
(K) - godziny kontaktowe (S) - godziny pracy samodzielnej
wykład (zajęcia): 21h (K) 0h (S)
ćwiczenia (zajęcia): 6h (K) 0h (S)
egzamin: 3h (K) 0h (S)
konsultacje: 6h (K) 0h (S)
przygotowanie do ćwiczeń: 0h (K) 18h (S)
przygotowanie do wykładów: 0h (K) 24h (S)
przygotowanie do kolokwium: 0h (K) 22h (S)
przygotowanie do egzaminu: 0h (K) 0h (S)
…: 0h (K) 0h (S)
Razem: 36h (K) + 64h (S) = 100h