REGULATORY ECONOMICS

Single discipline educational activity

Course Sheet

Course code:

000224L

Academic Year of enrolment:

2017

Year of supply:

2018/2019

Type of Course:

Characterising

Degree:

Course of 2nd Cycle Degree in ECONOMICS AND COMMERCE

Disciplinary Sector:

Finance

Language:

Italian

Location:

PESCARA

Credits:

Programme Year:

Professor and Collaborators:

ROSSI MARIA ALESSANDRA

Cycle:

Second semester

Hours of classroom activity:

Individual study hours:

153

Prerequisites:

Microeconomics and Mathematics for economics

Objectives

The main objective of the course is to provide students with the basic economic tools needed to analyse the ratio, forms and effects of the public regulation of markets, both from an ex ante and an ex post perspective. The course fits within the context of the course “Scienze Giuridiche per l’Internazionalizzazione e l’innovazione delle Imprese (Giur.Inn)” by providing knowledge and competences useful to understand the regulatory framework within which firm activities take place, so as to be able to face complex situations and devise innovative strategies from an interdisciplinary perspective. The acquired competencies concur also to confer graduates the ability to contribute to the definition of a firm positioning informed by substantial compliance with the relevant regulatory framework. They are functional to various job responsibilities: from internal general counsel to person in charge of regulatory and institutional affairs, to professional and consulting activities. Particular attention will be devoted to the practical application of the main economic concepts illustrated, so as to stimulate the ability to apply the acquired knowledge in real contexts with a higher degree of complexity with respect to textbook examples, critical spirit and the ability to communicate both orally and in written form.

Contents

The course introduces the student to the knowledge of the ratio, the tools and the effects of regulation and competition policies. Following a brief review of some key concepts of industrial organization (market forms and competitive dynamics) and of economic policy (theoretical foundations of state intervention), the key economic concepts underlying ex ante regulation (price, access, risk and externality regulation) and ex post regulation (market power, economic tools for the definition of the relevant market, cartels and horizontal agreements, abuse of dominant position, vertical restrictions, mergers, economic aspects of state aid law) will be introduced. Particular attention will be devoted to the evolution of economic regulation in light of technological change (regulation of digital platforms and of the internet, net neutrality, effects of convergence and big data). Emphasis will be given to the practical application of the economic models analysed rather than to theoretical refinement.

Extended Syllabus

1. INTRODUCTION AND BASIC CONCEPTS
1.1. The economic ratio of public intervention: market failures and government failures
1.1.1. Natural monopoly, imperfect competition and economic regulation (regulation of network industries and financial services)
1.1.2. Risk, externalities and social regulation (environment, health and security)
1.2. Elements of industrial economics: market forms and competitive dynamics
1.3. The institutions of regulation: horizontal and multi-level dynamics

2. FIRST PART: EX ANTE REGULATION
2.1. Price regulation
2.1.1. Price regulation with perfect information
2.1.2. Price regulation with imperfect information
2.1.3. Forms of price regulation: rate of return, price cap and hybrid forms
2.2. Regulation of access to essential infrastructures in network industries
2.2.1. One-way access regulation
2.2.2. Two-way access regulation
2.3. Regulation of universal services
2.4. Technological convergence and regulation of digital platforms
2.5. Big data as an object and a tool of regulation

3. SECOND PART: EX POST REGULATION AND COMPETITION POLICY
3.1. Economic definition of market power
3.2. Economic tools for the definition of the relevant market
3.3. Economics of cartels and horizontal agreements
3.4. Abuse of dominant position
3.5. Vertical restrictions
3.6. Mergers
3.7. Economic interpretation of state aid policy

Recommended Bibliography

INTRODUCTION AND FIRST PART:
Decker, C. (2015), Modern Economic Regulation. An Introduction to Theory and Practice, Cambridge University Press, Cambridge (selected chapters).
As an alternative, it is possible to use:
Cervigni and D’Antoni (2001) “Monopolio naturale, concorrenza, regolamentazione”, Carocci, Bologna (selected chapters).

SECOND PART:
Motta, M. and Polo, M. (2005) “Antitrust. Economia e politica della concorrenza”, Il Mulino, Bologna (selected chapters).

Additional material will be provided by the instructor in class.

Methods of Provision

Conventional

Teaching Methods

Interactive lectures, practical exercise sessions based on the analysis of regulation and competition authorities’ decisions, class presentations and “mock cases”, i.e. simulation of concrete regulation and competition cases. When participating to a mock case, students will be required to divide into groups corresponding to different positions assumed in a case (in favour or against specific positions in regulation/policy; claimant or defendant in an antitrust case) and to elaborate economic arguments to support their position in an open debate.

Evaluation methods

Verification of learning:

Oral exam. The exam will cover the topics illustrated in the course and indicated in the program. The evaluation will concern not only the specific knowledge of the topic contents, but also the use of terminology, the effectiveness in communication, the organization of discourse and the ability to elaborate and critically interpret the different topics.

Università degli Studi
"G. d'Annunzio"

Chieti - Pescara

Aree

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