Industrial Economics
Lecturer
Marco Valente
Course objectives
Provide students with the tools to interpret the dynamics of industries, with a special emphasis on organizational dynamics and the role of innovation.
Course content
 Introduction. Goals, review of standard micro-economics, and notions of methodology.
 Rationality. Decision making under uncertainty: perfect rationality vs. bounded rationality.
 Bounded rational consumer. Definition, preferences, marketing and social effects.
 Economic organizations: transaction costs vs. Simon's theory of the firm. Evolutionary theory of the firm: routine, competencies, etc.
 Elements of Evolutionary theory and Complexity theory.
 Economics of innovation: definitions and classification; Pavitt's taxonomy; Dosi's
technological paradigms and trajectories, patents and incentives.
 Market/product life cycles: Abernathy-Utterback, Klepper, dominant design.
 Special markets: financial markets, state-financed innovations, macro-economic effects of industrial dynamics.
Prerequisites
Students (BSc or MSc) are expected to know standard Microeconomics and have an interest
in markets for innovative products.
Instructional methods
Lectures
Reading list
Valente, M., 2012, “Evolutionary demand: a model for boundedly rational consumers”,
Journal of Evolutionary Economics, 22(5).
Simon, H.A., 1991, “Organizations and Markets”, Journal of Economic Perspectives, 5(2).
Abernathy, W.J. and Utterback, J.M., 1978, “Patterns of Industrial Innovation”, Technological Review.
Time schedule
6 hours of teaching per day (an hour lasts 45 minutes).
Daily schedule:
Morning: Lecture from 08.30 to 10.00, break from 10.00 to 10.15, and another lecture 10.1511.45.
Lunch break: 12.00-13.00.
Afternoon: Lecture from 13.00 to 14.30.
Assessment
Essays on one or two case studies highlighting the some of the topics discussed during the course.
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