Advanced Industrial Organization

Course content

This course advances on some topics from the undergraduate course on Industrial Organization (IO). The course covers both theoretical and empirical IO. Topics include Price Discrimination, Auctions, Regulation of Monopolies, Demand Estimation, Firm Heterogeneity, Moment Inequalities in Applied Work, Market Power, Mergers, Collusion, Entry and Exit, Single Agent Dynamics, Two-sided Markets, Vertical Relationships, and Behavioral Industrial Organization.

Learning outcome

The aim is that the students get an advanced knowledge of modern IO theories, and how theory and data can be combined to shed light on real world problems such as competition policy (anti-trust).

The students should acquire a level of knowledge, where they understand the details of the theories and are able to analyze problems within industrial organization using the acquired theoretical and empirical tools. It is the aim that the student learns how to model economic problems in markets with few firms, using the appropriate (often game theoretic) methods, as well as how these models are solved. The students should also learn how empirical studies build on the theoretical models (structural estimation), the chief difficulties faced by such empirical work, and how these difficulties can be overcome. The students should be able to discuss the real-world relevance of the theories in an informed manner based on empirical data.

The book by Tirole is a classic text on IO theory. Although it never really goes out of date and is still a standard reference for every serious IO specialist, the book is now almost 30 years old. To bring the students to the research frontier, more recent research papers will cover various topics in theoretical IO. In addition, a number of research papers will cover empirical approaches to IO.

Within the areas covered in the course, the aim is that students should be able to:


  • Understand the theories at a level as found in research papers published in the major journals.
  • Understand how theoretical models underpin modern empirical IO (structural estimation), and the chief difficulties faced in empirical work, and how these difficulties are overcome in the modern literature.


  • Solve formal models using tools from mathematical optimization theory and game theory.
  • Analyze questions related to industrial organization drawing upon one or more theories and to present this analysis in writing using a scientific and concise language.


  • Analyze formal models that are variations of the models and theories covered in the course and to provide economic intuition for the results obtained.


Jean Tirole: “The Theory of Industrial Organization” MIT press, 1988, plus a number of journal articles.

The course Industrial Organization or equivalent as well as basic game theory and econometrics is recommended.

3 hours lectures a week from week 6 to 20 (except holidays).

Timetable and venue:
The schedule for the semester spring 2018 will be available no later than 7th of November 2017

7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
Individual exam at the computers of Copenhagen University.
The exam assignment is given in English and must be answered in English.
Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
if chosen by the Head of Studies
Criteria for exam assessment

Students are assessed on the extent to which they master the learning outcome for the course.

To receive the top grade, the student must be able to demonstrate in an excellent manner that he or she has acquired and can make use of the knowledge, skills and competencies listed in the learning outcomes.

Single subject courses (day)

  • Category
  • Hours
  • Lectures
  • 42
  • Preparation
  • 161
  • Exam
  • 3
  • English
  • 206