2017
From July 3rd to July 7th
INDUSTRIAL
ORGANIZATION
Markets strategy,
firms’ performance
and regulation
PSE SUMMER SCHOOL
www.parisschoolofeconomics.eu
INDUSTRIAL
ORGANIZATION
PSE SUMMER SCHOOL 2017
INDUSTRIAL ORGANIZATION
Markets strategy, firms’ performance
and regulation
rd
th
From July 3 to July 7 2017
OVERVIEW
This program will consist of three main topics in Industrial Organization: Economics of Platforms, Competition Policy and
new empirical aspects of industry dynamics and productivity. The program offers a blend of theory and empirics.
With regard to the first topic, 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. He will develop the theoretical literature that provides the main tools to understand firms’ strategies
and market performance of these types of industries.
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.
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.
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/en/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/en/gagnepain-philippe/
PSE SUMMER SCHOOL 2017
www.parisschoolofeconomics.eu
PSE SUMMER SCHOOL 2017
INDUSTRIAL ORGANIZATION
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/en/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/en/spector-david/
Programme Supervisors: Philippe Gagnepain and Jean-Philippe Tropéano
SCHEDULE
The program will be organized to balance empirical and more theoretical presentations. The workshop is dedicated to
the presentation of selected participants’ research papers.
Monday July, 3rd
8.30 am - 9 am Welcome session
9 am - 10.30 am Angelo Secchi, Industrial Dynamics
10.30 am - 10.45 am Coffee break
10.45 am - 12.15 pm Angelo Secchi, Industrial Dynamics
12.15 pm - 1.15 pm Lunch
1.15 pm - 2.15 pm Workshop with Bernard Caillaud and Angelo Secchi
2.15 pm - 3.45 pm Bernard Caillaud, The Economics of Platforms
3.45 pm - 4 pm Coffee break
4 pm - 5.30 pm Bernard Caillaud, The Economics of Platforms
Tuesday July, 4th
9 am - 10.30 am Angelo Secchi, Industrial Dynamics
10.30 am - 10.45 am Coffee break
10.45 am - 12.15 pm Angelo Secchi, Industrial Dynamics
12.15 pm – 1.30 pm Lunch
1.30 pm - 3 pm Bernard Caillaud, The Economics of Platforms
3 pm - 3.15 pm Coffee break
3.15 pm - 4.45 pm Bernard Caillaud, The Economics of Platforms
Wednesday July, 5th
9 am - 10.30 am Philippe Gagnepain, Competition Policy: Empirical Methods
10.30 am - 10.45 am Coffee break
10.45 am - 12.15 pm Philippe Gagnepain, Competition Policy: Empirical Methods
12.15 pm - 1.30 pm Lunch
1.30 pm - 2.30 pm Tutorial with Angelo Secchi (computer lab)
2.30 pm - 2.45 pm Coffee break
2.45 pm - 4.15 pm Bernard Caillaud, The Economics of Platforms
4.15 pm - 4.30 pm Coffee break
4.30 pm - 6 pm Bernard Caillaud, The Economics of Platforms
PSE SUMMER SCHOOL 2017
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PSE SUMMER SCHOOL 2017
INDUSTRIAL ORGANIZATION
Thursday July, 6th
9 am - 10.30 am Philippe Gagnepain, Competition Policy: Empirical Methods
10.30 am - 10.45 am Coffee break
10.45 am - 12.15 pm Philippe Gagnepain, Competition Policy: Empirical Methods
12.15 pm - 1.15 pm Lunch
1.15 pm - 2.15 pm Workshop with Philippe Gagnepain and David Spector
2.15 pm - 3.45 pm David Spector, Recent advances in competition economics
3.45 pm - 4 pm Coffee break
4 pm - 5.30 pm David Spector, Recent advances in competition economics
Friday July, 7th
9 am - 10.30 am Philippe Gagnepain, Competition Policy: Empirical Methods
10.30 am - 10.45 am Coffee break
10.45 am - 12.15 pm Philippe Gagnepain, Competition Policy: Empirical Methods
12.15 pm - 1.30 pm Lunch
1.30 pm - 2.30 pm Workshop with Philippe Gagnepain and David Spector
2.30 pm - 2.45 pm Coffee break
2.45 pm - 4.15 pm David Spector, Recent advances in competition economics
4.15 pm - 4.30 pm Coffee break
4.30 pm - 6 pm David Spector, Recent advances in competition economics
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 2017
www.parisschoolofeconomics.eu
A SUMMER
ON THE JOURDAN CAMPUS…
The 2017 Summer School will take place in the new PSE building, situated on the Jourdan campus in the 14th
arrondissement of Paris, which has just been officially inaugurated by President François Hollande. Designed by the
architectural company TVAA and jointly funded by the Région Île-de-France, the central state and the city of Paris, the
12 500 m² building houses researchers, students, and administrative teams of the Paris School of Economics and the
Ecole normale supérieure.
PSE SUMMER SCHOOL 2017
www.parisschoolofeconomics.eu
INDUSTRIAL ORGANIZATION
PSE SUMMER SCHOOL 2017
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.
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.
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 2017
www.parisschoolofeconomics.eu
INDUSTRIAL ORGANIZATION
PSE SUMMER SCHOOL 2017
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.
This is an 9h course in Industrial Organization. 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
might also be discussed for its economic content. Ultimately, students should be able to start their own research
agendas in the field.
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
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 2017
www.parisschoolofeconomics.eu
INDUSTRIAL ORGANIZATION
PSE SUMMER SCHOOL 2017
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 2017
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PSE SUMMER SCHOOL 2017
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 2017
www.parisschoolofeconomics.eu
INDUSTRIAL ORGANIZATION
PSE SUMMER SCHOOL 2017
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
REFERENCES
- Asker, John and Heski Bar-Isaac, (2014), “Raising Retailers' Profits: On Vertical Practices and the Exclusion of
Rivals”, American Economic Review, 104(2), 672-686.
- Awaya, Yu, 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, Joseph 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, Eric, Ramseyer, JM, Wiley, J, (1991). "Naked Exclusion," American Economic Review, 81(5), 11371145.
- Spector, David, (2011), “Exclusive contracts and demand foreclosure”, Rand Journal of Economics, 42(4), 619638
- Spector, David, (2016), “Cheap talk, monitoring and collusion” (unpublished).
PSE SUMMER SCHOOL 2017
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HOW TO APPLY TO THE PSE SUMMER SCHOOL 2017
Presentation
Our ten one-week programmes are entirely run in English. Each includes a total of around 30 hours instruction and
consists of different thematic courses that are complementary. At the end of the programme, you will receive a
certificate. You are expected to participate in all of the courses of their one-week programme; you can follow only one
programme per week, but can apply to three consecutive ones.
Each programme is equivalent to 3 ECTS. Students interested in this transfer should contact their universities.
Here are the links to the different programmes (lectures, Professors, schedule, prerequisites etc.):
CLIMATE
CHANGE
MACROECO.
MICROECO.
MIGRATION
ECONOMICS
DEVELOPMENT
EXPERIMENT.
ECONOMICS
HEALTH
TRADE
BOUNDED
RATIONALITY
INDUSTRIAL
ORGANIZATION
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 can apply continuously till the final deadline, which is Monday May the 15th.
You can start the process whenever you want, create and save your profile step by step, until the final submission. Each
application will be reviewed by the programme supervisor(s) within 15 days afterwards. Once accepted, you will have
then 15 days to pay the total fees and therefore validate your participation. You will then receive detailed information
about the courses, workshops, and social events, as well as suggestions for accommodation.
We advise you not to wait until the last moment. Applications will be reviewed continuously: if the maximum number
of participants is exceeded, applicants will be put on the wait list.
Fees
Fees include lunches and
coffee breaks every day,
as well as the welcome
and
the
farewell
cocktails. The fees do not
include accommodation,
transport or any other
services.
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, 2017: 80% refund
- Cancellation before June 1st, 2017: 50% refund
- Cancellation after June 1st, 2017: no refund possible
Any questions? [email protected]
PSE SUMMER SCHOOL 2017
www.parisschoolofeconomics.eu
PSE SUMMER SCHOOL
2017, PARIS
www.parisschoolofeconomics.eu