Markets and Competition


On completion of this course a student should be able to:
A. Knowledge and Understanding:
 • Understand the microeconomic foundations of managerial decision making.
B. Subject Specific Skills:
 • Understand the fundamental concepts of production and pricing decisions.
 • Understand and apply the concepts of market power and different types of market structure.
 • Understand the concepts of strategic interactions and strategic behavior and apply them to specific markets.
C. General Skills:
 • Understand the methodology of economic analysis and recognize which concepts to apply to different business situations.
 • Strengthening of analytical capabilities.

General characterization





Responsible teacher

Pedro Miguel Soares Brinca


Weekly - Available soon

Total - Available soon

Teaching language





Baye, Michael and J. Prince Managerial Economics & Business Strategy, Irwin – McGraw Hill, 7th edition, 2010.
Chapters of additional books will be posted on the course website.

Teaching method

The emphasis of the course is on the application of economic ideas to real life cases and events, with a new topic in each
lecture. We will spend some time discussing the economic concepts, but will focus mostly on applying them. A number of
short case studies will help to see how these concepts apply to different business contexts, and a few games will be played
that illustrate strategic issues. You will prepare the assigned cases and articles and be ready to discuss them in class. All
students are expected to be able to contribute to the discussion.

Evaluation method


Subject matter

Modeling markets: Demand and supply
2. Looking at the individual: Consumer demand, and firms’ costs.
3. Characterizing markets: Structure, conduct, performance.
4. Managing in markets: From competition to monopoly.
5. Competing with the few: Strategic interactions.
6. Thinking ahead: Strategic behavior and repeated interactions.
7. Realizing value: Pricing strategies with market power.
8. Taking the long view: Strategies for market structure
9. Defining the rules: Government intervention.


Programs where the course is taught: