Programme available in 2019
INDUSTRIAL ORGANIZATION Markets strategy, firms’ performance and regulation
PSE SUMMER SCHOOL
www.parisschoolofeconomics.eu
PSE SUMMER SCHOOL 2018
INDUSTRIAL ORGANIZATION
INDUSTRIAL ORGANIZATION
Markets strategy, firms’ performance and regulation Programme available in 2019
OVERVIEW This program will consist of three main topics in Industrial Organization: Competition Policy, Economics of Platforms, and new empirical aspects of industry dynamics and productivity. The program offers a blend of theory and empirics. Competition Policy is obviously a large and diverse subject. We decided to consider this year two main aspects of it. Philippe Gagnepain will discuss the empirical side of the topic. He will develop the main techniques used to assess market power, cartel damages and to carry out merger simulations. His presentation will be both up-to-date and comprehensive with a particular attention to the applications to cases. David Spector will address a few economic issues raised in several recent antitrust cases. He will focus in particular on some recent advances in the theory of exclusionary conduct, and on practices that can facilitate collusion, such as information exchanges or certain vertical restraints. Bernard Caillaud will consider industries organized around platforms such as the video game sector, the media industry or the card payment system. The rising of the internet clearly makes these configurations more and more common and raises questions for regulators and competition authorities. He will develop the theoretical literature that provides the main tools to understand firms’ strategies and market performance of these types of industries. He will also show how traditional antitrust analysis of firms’ strategies may be affected by these platforms. Angelo Secchi proposes an overview of the statistical properties characterizing the structure and the dynamics of modern business firms obtained in the last few decades thanks to the availability of micro data. We set up stylized theoretical frameworks in which the origin of these properties can be investigated. Concerning productivity, Angelo Secchi will present the state of the art techniques to estimate the different indexes of productivity. He will also review the main stylized facts on productivity together with its major determinants.
WORKSHOP Participants will have the opportunity to submit a paper to be presented within this program. Selected papers will be presented in front of participants and faculty in daily one-hour slots.
PREREQUISITES Students are assumed to have good knowledge of Game Theory, Microeconomics and Econometrics (Master level or very good undergraduate level). Each professor has additional pre-requisites in each course description.
PSE SUMMER SCHOOL 2018
www.parisschoolofeconomics.eu
PSE SUMMER SCHOOL 2018
INDUSTRIAL ORGANIZATION
PROFESSORS Bernard Caillaud is Professor at the PSE and Ingénieur des Ponts et Chaussées at Ecole Nationale des Ponts et Chaussées. His recent research in Industrial Organization addresses issues related to the development of the digital economy: the economics of platforms, price discrimination and personal data, the economics of intellectual property. His work with Bruno Jullien is among the first published papers on platforms. http://www.parisschoolofeconomics.eu/fr/caillaud-bernard/ Philippe Gagnepain is Professor at the PSE and at Université de Paris 1. He does research on empirical aspects of firms strategies. He recently published a paper with David Martimort in the AER on the empirical aspects of contracts in the urban transport industry. http://www.parisschoolofeconomics.eu/fr/gagnepain-philippe/ Angelo Secchi is Professor of Economics at Université Paris 1 Panthéon-Sorbonne and at Paris School of Economics. His research covers industrial dynamics, international trade, economic geography and applied econometrics and it has been published in several peer-reviewed international journals. http://www.parisschoolofeconomics.eu/fr/secchi-angelo/ David Spector is associate Professor at PSE and Chargé de Recherche at CNRS. He is also partner at MAPP which is a firm of experts dedicated to antitrust cases. His research is mostly on antitrust. http://www.parisschoolofeconomics.eu/fr/spector-david/ Programme Supervisors: Philippe Gagnepain and Jean-Philippe Tropéano
PSE SUMMER SCHOOL 2018
www.parisschoolofeconomics.eu
PSE SUMMER SCHOOL 2018
INDUSTRIAL ORGANIZATION
SCHEDULE The program will be organized to balance empirical and more theoretical presentations.
Monday June, 25th 9 am - 9.30 am Welcome Coffee 9.30 am – 12.30 pm David Spector, Recent Advances in Competition Economics 12.30 pm - 1 pm Lunch 1 pm - 2 pm Workshop with David Spector and Angelo Secchi 2 pm - 2.30 pm Break 2.30 pm - 5.30 pm Angelo Secchi, Industrial Dynamics 5.30 pm – 6.30 pm Thomas Piketty, Plenary Lecture From 6.30 pm Welcome cocktail
Tuesday June, 26th 9 am - 12 pm David Spector, Recent Advances in Competition Economics 12 pm - 12.45 pm Lunch 12.45 pm - 1.45 pm Tutorials with Angelo Secchi 1.45 pm - 2 pm Break 2 pm - 5 pm Angelo Secchi, Industrial Dynamics From 6 pm Social Event
Wednesday June, 27th 9 am - 12 pm Bernard Caillaud, The Economics of Platforms 12 pm - 12.30 pm Lunch 12.30 pm - 1.30 pm Workshop with Philippe Gagnepain and Bernard Caillaud 1.30 pm - 2 pm Break 2pm - 5 pm Philippe Gagnepain, Competition Policy: Empirical Methods
Thursday June, 28th 9 am - 11.30 am Bernard Caillaud, The Economics of Platforms 11.30 am - 12 pm Break 12 pm - 1 pm Workshop with Philippe Gagnepain and Bernard Caillaud 1 pm - 2 pm Lunch 2 pm - 5 pm Philippe Gagnepain, Competition Policy: Empirical Methods From 6 pm Social Event
Friday June, 29th 9 am - 11.30 am Bernard Caillaud, The Economics of Platforms 11.30 am - 12 pm Break 12 pm - 1 pm Workshop with Philippe Gagnepain and Jean-Philippe Tropeano 1 pm - 2 pm Lunch 2 pm - 4 pm Philippe Gagnepain, Competition Policy: Empirical Methods From 6.15 pm Social Farewell cocktail/certificates
PSE SUMMER SCHOOL 2018
www.parisschoolofeconomics.eu
PSE SUMMER SCHOOL 2018 INDUSTRIAL ORGANIZATION
INDUSTRIAL ORGANIZATION
Industrial Dynamics Angelo Secchi
OBJECTIVES
This course takes place on Monday and Tuesday
Modern economies are characterized by ubiquitous, large and persistent forms of heterogeneity in any dimensions of business firms’ characteristics and of their dynamics. The primary scope of this mini-course is to present an overview of the empirical investigations on the nature and on the evolution of such a rich landscape underlying industrial structures with a specific emphasis on developed economies. The course includes tutorials where students apply the techniques taught by Angelo Secchi.
COURSE STRUCTURE 1. Industrial Dynamics We propose an overview of the statistical properties characterizing the structure and the dynamics of modern business firms obtained in the last few decades thanks to the availability of micro data. We set up stylized theoretical frameworks in which the origin of these properties can be investigated. 2. Productivity After defining different indexes of productivity we present the state of the art techniques to estimate them. We, then, review the main stylized facts on productivity together with its major determinants.
PREREQUISITES Knowledge of master level microeconomic theory, industrial organization and applied econometrics is expected.
REFERENCES - Van Beveren I, (2011). “Total factor productivity estimation: a practical review”, Journal of Economic Surveys, 26, pp. 98128. - Syverson C., (2011). “What determines productivity?”, Journal of Economic Literature, 49, pp.326-365. - Bottazzi G. and Angelo Secchi, (2006). “Explaining the distribution of firm growth rates”, The RAND Journal of Economics, 37, pp. 235-256. - Gabaix X., (2016). “Power laws in economics: An introduction”, Journal of Economic Perspectives, 30, pp. 185206.
PSE SUMMER SCHOOL 2018
www.parisschoolofeconomics.eu
PSE SUMMER SCHOOL 2018 INDUSTRIAL ORGANIZATION
INDUSTRIAL ORGANIZATION
The economics of platforms Bernard Caillaud
This course takes place on Monday, Tuesday and Wednesday
OBJECTIVES This course will focus on network effects, in particular on services / platforms that are available to several groups of users among which there exist cross-network externalities. This theory of so-called two-sided markets, developed along the last 10 years, offers many new insights to analyze industries such as video games, matchmaking agencies, credit card systems or the media, and it is particularly central to the analysis of the new business models in the digital economy that are based on advertising. The goal is to familiarize students with the basic contributions on the topic and then to study selected recent advances. The course will follow a theoretical approach. Some applied work will also be discussed for its economic content. In particular, Bernard Caillaud will show how traditional antitrust analysis of firms’ strategies may be affected by these platforms.
COURSE STRUCTURE 1. 2. 3. 4. 5. 6.
Basics 1: Monopolistic two-sided platforms Basics 2: Competing platforms: single and multihoming Private contracts, non-observable contracts Advertising-based platform models Reseller vs marketplace / platform: choice of a business model Economic policy facing platforms: taxation and antitrust
PREREQUISITES A solid background in microeconomics and applied game theory is necessary. A good knowledge of standard industrial organization is also required.
REFERENCES - Armstrong, M. (2006): “Competition in Two-Sided Markets”, RJE, 37(3), 668–91. - Armstrong, M. and J. Wright (2007): "Two-sided markets, competitive bottlenecks and exclusive contracts", ET, 32, 353-380. - Caillaud, B. and B. Jullien (2003), “Chicken & Egg: Competition among Intermediation Service Providers”, RJE, 34(2), 309–28. - Halaburda, H. and Y. Yehezkel (2013): “Platform competition under asymmetric information”, AEJ micro, 5(3), 2268. - Halaburda, H., B. Jullien and Y. Yehezkel (2015): “Dynamic Platform Competition” mimeo. - Hagiu, A. (2007): "Merchant or Two-Sided Platform?", Rev. Network Econ., 6(2), 115–133. - Hagiu, A. and H. Halaburda (2014): “Information and Two-Sided Platform Profits”, IJIO, 34, 25–35. - Hagiu, A. and J. Wright (2015): "Marketplace or Reseller?", Mgt. Sc., 61(1), 184-203. - Hagiu, A. and J. Wright (forthcoming): "Multi-Sided Platforms", IJIO. - Johnson, J. (2014): "The Agency and Wholesale Models in Electronic Content Markets", mimeo. - Jullien, B. (2014) : « Competition in Multi-Sided Markets: Divide-and-Conquer », AEJ micro, 3(4), 1–35. - Llanes, G. and F. Ruiz-Aliseda (2015): “Private contracts in Two-Sided Markets”, mimeo. - Rochet, J.-C. and J. Tirole (2003): “Platform Competition in Two-Sided Markets”, JEEA, 1(4), 990–1029. - Rochet, J.-C. and J. Tirole (2006): “Two-Sided Markets: A Progress Report”, RJE, 37(3), 645–67. - Weyl, G. (2010): “A Price Theory of Multi-sided Platforms”, AER, 100(4), 1642–72. - Weyl, G. and A. White (2010): “Imperfect Platform Competition: A General Framework”, unpublished.
PSE SUMMER SCHOOL 2018
www.parisschoolofeconomics.eu
PSE SUMMER SCHOOL 2018 INDUSTRIAL ORGANIZATION
INDUSTRIAL ORGANIZATION
Competition Policy: Empirical Methods Philippe Gagnepain This course takes place on Wednesday, Thursday and Friday
OBJECTIVES This class will develop the main empirical methods used in competition policy. In particular, we will focus on the tools used to identify firms’ conduct and shed light on the nature of competition, quantify the damages of a cartel or those faced in the case of an abuse of dominant position; we will learn as well to simulate the economic consequences of a merger between firms. We will focus moreover on firms’ regulation and markets deregulation, which entails studying empirical applications of contract theory in a situation of asymmetric information between regulators and operators and discuss tools which allow appraising the effects of deregulation on operating costs. Special emphasis will be given in this course to the construction of each empirical model that will be tested with data.
COURSE STRUCTURE 1. Identification of Conduct a. The Role of Structural Indicators b. Directly Identifying the Nature of Competition 2. Mergers a. Best Practice in Merger Simulation b. Introduction to Unilateral Effects c. General Model for Merger Simulation 3. Cartels a. Effects of cartel b. Quantifying Damages of a Cartel 4. Regulation, deregulation, and efficiency a. Incentives and structural cost functions. b. Measuring efficiency c. Deregulation: The impact on costs, competition, and prices. d. Structural versus reduced functional forms.
REFERENCES Recommended textbook - Peter Davis & Eliana Garcés, Quantitative Techniques for Competition and Antitrust Analysis, Princeton University Press Articles - Duso, T, Neven, D, Roeller, L-H, (2005), “The Political Economy of European Merger Control: Evidence using Stock Market Data”, forthcoming, Journal of Law and Economics. - Gagnepain, P. and M. Ivaldi (2002a) “Incentive Regulatory Policies: The Case of Public Transit Systems in France”. Rand Journal of Economics, vol. 33, pp. 605-629. - Gagnepain, P., and P. Marin (2006) “Regulation and Incentives in European Aviation”, Journal of Law and Economics, 49, 229-248. - Genesove, D., and W.P. Mullin. (1998) “Testing Static oligopoly Models: Conduct and Cost in the Sugar Industry, 1890-1914”, Rand Journal of Economics, pp. 355-377. - Ivaldi, M. and F. Verboven. (2005) “Quantifying the effects from horizontal mergers in European Competition Policy”, International Journal of Industrial Organization, vol. 23, pp. 669-691. - Levenstein, M, (1997) “Price wars and the stability of collusion: A study of the pre-World War I bromine industry”, The Journal of Industrial Economics, Vol. XLV (2), pp. 117-137. - Neven, D.J., L-H Röller, and Z. Zhang (2006) “Endogenous costs and price-cost margins: An application to the European airline industry”. The Journal of Industrial Economics, vol. 54, pp. 351-367.
PSE SUMMER SCHOOL 2018
www.parisschoolofeconomics.eu
PSE SUMMER SCHOOL 2018
INDUSTRIAL ORGANIZATION
- Ng C.K. and P. Seabright 2001) “Competition, Privatization, and Productive efficiency: Evidence from the Airline Industry''. The Economic Journal, vol. 111, pp. 591-619. - Parker, P.M., and L-H Röller (1997) “Collusive Conduct in Duopolies: Multimarket Contact and CrossOwnership in the Mobile Telephone Industry”, Rand Journal of Economics, 28, pp. 304-322. - Steen, F, Roller, L-H, (2006) “On the Workings of a Cartel: Evidence from the Norwegian Cement Industry”, American Economic Review, Vol. 96 (1), pp. 321
PSE SUMMER SCHOOL 2018
www.parisschoolofeconomics.eu
PSE SUMMER SCHOOL 2018 INDUSTRIAL ORGANIZATION
INDUSTRIAL ORGANIZATION
Recent advances in competition economics David Spector This course takes place on Thursday and Friday
OBJECTIVES This course presents recent theoretical advances in two fields of competition economics, namely exclusionary strategies (in legal terms, attempts to monopolize in the US or abuses of dominant positions in Europe) and collusion. On the first topic, it focuses on how dominant firms can use exclusivity clauses and market-share discounts in order to deter entry or evict competitors. On the topic of collusion, it addresses two sets of issues: (i) how communication can facilitate mutual monitoring and compliance with a collusive agreement, even when it seems to be innocuous cheap talk, and (ii) the interplay between vertical restraints and horizontal collusion.
TOPICS 1. 2. 3. 4. 5. 6. 7. 8.
Collusion Information exchanges Vertical restraints Cheap talk Exclusionary practices Exclusive dealing Market-share discounts Competition policy
PREREQUISITES Advanced microeconomics and game theory
REFERENCES - Asker, J. and H. Bar-Isaac, (2014), “Raising Retailers' Profits: On Vertical Practices and the Exclusion of Rivals”, American Economic Review, 104(2), 672-686. - Awaya, Y., and V. Krishna, (2014), “On Communication and Collusion”, American Economic Review, forthcoming. - Calzolari, Giacomo and Vincenzo Denicolò. (2015). "Exclusive Contracts and Market Dominance." American Economic Review, 105(11): 3321-51. - Harrington, J. E., (2006), “How Do Cartels Operate?”, Foundations and Trends in Microeconomics 2(1), 1-108. - Ide, E., Montero J.P. and N. Figueroa, (2016). "Discounts as a Barrier to Entry", American Economic Review, 106(7), 1849-77. - Rasmusen, E., Ramseyer, JM, Wiley, J, (1991). "Naked Exclusion," American Economic Review, 81(5), 11371145. - Spector, D., (2011), “Exclusive contracts and demand foreclosure”, Rand Journal of Economics, 42(4), 619-638 - Spector, D., (2016), “Cheap talk, monitoring and collusion” (unpublished).
PSE SUMMER SCHOOL 2018
www.parisschoolofeconomics.eu
HOW TO APPLY TO THE PSE SUMMER SCHOOL 2018 Presentation
Our one-week programmes are entirely run in English. Each includes a total of around 30 hours instruction and workshops and consists of different thematic courses that are complementary. You are expected to participate in all of the courses; you can follow only one programme per week, but can apply to two consecutive ones. At the end of the programme, you will receive a certificate. Each programme is equivalent to 3 ECTS (European Credit Transfer System). Students interested in this transfer should contact their universities. Here are the links to the different programmes (lectures, Professors, schedule, prerequisites etc.): First week - from June 18 to June 22
CLIMATE CHANGE
MACROECO.
MICROECO.
Second week - from June 25 to June 29
MIGRATION ECONOMICS
TRADE
BOUNDED RATIONALITY
DEVELOPMENT
EXPERIMENTAL ECONOMICS
HEALTH
INDUSTRIAL ORGANIZATION [available in 2019]
Participant profiles and selection
The PSE Summer School is aimed at professionals, researchers, as well as graduate students in Economics and Finance (Masters and PhD). Undergraduate students in Economics will be considered only if their profile is exceptionally strong. To be included in your application file: • A current Curriculum Vitae in pdf format • A copy of your most advanced degree • A short motivation text
• • •
A profile picture [not used per se in the application process] For Students: proof of status Optional - Letter(s) of recommendation
On www.pse-application.eu, candidates are invited to submit their applications on a rolling-basis. You can start the process whenever you want, create and save your profile step by step. Once we get your final submission, your applications file will be evaluated within 10 days until May 31, 2018 based on availability of spots in the relevant programs. Once accepted, you will be requested to pay the total fees within 30 days*. Your participation will then be confirmed, and you will receive detailed information about the courses, workshops, and social events, as well as suggestions for accommodation. * For those applying after May 10, 2018, the payment deadline is in any case June 10, 2018.
Fees
Fees include lunches and social events, as well as the welcome and the farewell cocktails. The fees do not include accommodation, transport or any other services.
Applicants not sponsored by their organizations Fees for Students = 1200€ Fees for other Participants = 1500€
Applicants sponsored by their organizations Excluding applicants from Universities (non-sponsored fees applies)
Fees = 2000€
A 250€ discount will be offered on each additional programme. For example: if you are a student attending 2 weeks, the total fees will be 2150€ Note that PSE Alumni, Students and Members receive a 10% discount.
Cancellation policy - Confirmed participants who wish to cancel must do so in writing by email. When withdrawing from the programme, participants will have their tuition fees partially refunded as follows: - Cancellation before May 1st, 2018: 80% refund - Cancellation before June 1st, 2018: 50% refund - Cancellation after June 1st, 2018: no refund possible Any questions?
[email protected]
PSE SUMMER SCHOOL 2018
www.parisschoolofeconomics.eu
A SUMMER ON THE JOURDAN CAMPUS… The 2018 Edition will take place at PSE in the 14th arrondissement of Paris. A new 12500 m² building houses around 1500 researchers, students, and administrative teams of the PSE and the Ecole normale supérieure. The 1-hectare Jourdan campus offers ideal conditions: numerous classrooms and working spaces, a 300 places amphitheater, a library with more than 50000 books, a student home… More (online) about the Jourdan Campus – google maps, gallery, video
SUMMER SCHOOL
2018, PARIS www.parisschoolofeconomics.eu
