Industrial Organization
Industrial Organization (IO) is the modern economic discipline based on Operations Research. IO includes the following subjects: IO and Public Policy; IO and Competitive Strategy; Health Economics; Government Regulation of Industry; Economics of Incentives: Theory and Applications; Economics and E-Commerce; IO; Advanced Topics in IO; Competition in Telecommunications; Contract Economics; Introduction to Organizational Economics; Advanced Topics in Organizational Economics; Health Economics Seminar; Collective Choice. IO answers why the real world markets are imperfect, why products are very different on some markets and very similar on other markets, why production costs are sometimes less important than other costs, why investments to research and development are different in different industries.
Industrial Organization and Public Policy
Industrial Organization and Public Policy is focused on how markets and firms depend on public interventions. The markets themselves are public products. The market power of a firm is determined by its dominance, monopoly position, dynamic strategy, interactions with other firms, including competition or cooperation. Monopolies, cartels, oligopolies, mergers and acquisitions, collusions, price-fixing are subjects of antitrust policy and law. In competition firms use internal and external restructuring, entry deterrence, predatory pricing, raising rivals’ costs, advertising. Competition covers many dimensions – price, space, quality, durability, service, and network. Research and development create new markets, leading to competition in markets and competition for markets.
Economics of Incentives
Economics of Incentives is the subject of Industrial Organization based on the increasing role of human capital and corresponding institutions for sustainable economic development. Modern specialization means division of labor, division of labor induces delegation and exchange, and delegation leads to explicit and implicit contracts. Contract design is subject to organizational and legal culture, asymmetry of information available. The contract verification mechanisms are used to take into account participation constraints and avoid adverse selection. Limited liability, used for risk aversion and firm efficiency, may create moral hazard, commitment and corruption problems. Economics of Incentives shows how to limit those problems.
Tutor of the course:
V. Gorbachuk, Cybernetics Institute, Kyiv Polytechnic Institute, Kyiv Mohyla Academy, Ukraine