COURSE DESCRIPTION
Winter/Spring Semester 2020

Prof. Anna P. Della Valle
Prof. Filippo Pavesi (Firm Characteristics Workshop)

The aim of this course is to give students a strategic understanding of the behavior of firms and other market participants in economies across the world. It does so by focusing on ways in which firm-specific strategies influence market structure, as well as ways in which firms choose strategies in response to the structure of the markets in which they operate. Within this context, the government can play an important role in influencing firm behavior, market structure and market outcome.

Specifically, this course will focus on:
(1) Identifying firm-specific objectives and organizational, pricing and marketing strategies under different market structures and conditions.
(2) Addressing the rationale for and impact of government intervention into markets and its effect on market structure and firm strategy, including regulation, subsidies, tariffs, quotas, antitrust laws, patents and copyrights.
(3) Understanding the underlying forces that determine firm size, incentives within organizations and corporate hierarchies.

The lectures will make extensive use of real-world examples, case studies and in-class experiments to illustrate and analyze these relationships and interactions, including:
• Hollywood strategy: what movies to release and when
• Zegna, Ferrero, Armani, Illy: privately held and proud of it
• Bayer, Coca-Cola, Gucci: the power of brand name
• Tech sector: waiting longer before going public
• The Italian highway system: a public/private partnership
• Collusion pays off (even if you’re caught): vitamins, flat screens, beer, banking
• Cooperative in-class experiment: why cartel members cheat
• Monopolization antitrust suits: Microsoft and Intel
• Do Facebook and Google have too much market power?
• Government regulation in the market for cigarettes
• Cheap Chinese imports: rationales for and against trade restrictions

Course materials:
Copies of lecture slides and notes, links to newspaper and journal articles and video links to interviews and forum discussions will be posted each week on the course’s university website MY LIUC. Students are required to read all of the course materials in a timely manner in order to participate actively in class dialogue and debate. Enrollment in this class involves a commitment from students to dedicate the time and energy required to be prepared and active class participants.

Textbook (optional): Luis Cabral, Introduction to Industrial Organization, MIT Press, 2000.
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Course Prerequisites (no exceptions): Solid foundation in microeconomic theory in the form of one or more courses in microeconomics. Coursework in industrial organization also useful. The course is meant for graduate students in economics. Undergraduate students who have completed at least the first two years of their undergraduate studies in economics can be admitted to the course upon permission of the instructor.

Past Guest Speakers:
Luxury goods: Anna Zegna, Image Director Zegna Group, President Zegna Foundation
Banking: Prof. Eugenio Namor, Professor LIUC, President Anthilia Capital Partners
Valuation analysis: Dr. Fabrizio Malavolti, Hammer Partners

Course grading:
The total course grade is out of 30 points of which 70% (21/30 points) from Prof. Della Valle's portion of the course and 30% (9 points) from the Laboratory in Lobbying Strategy taught by Prof. Massa. The grade for Prof. Della Valle's portion of the course will be as follows:
Class participation 20% (4 pts.): Class participation is measured by class attendance and active participation in class discussions.
Group project 50% (10 pts.): Student groups will prepare an in-class presentation on a real-world case study or hypothetical business strategy of their choosing relevant to the content of the course. The presentations will take place during the last two classes of the semester.
Topic-specific paper: 15% (4 pts.) Student groups will write a short paper analyzing a specific topic of their choice among a list of topics associated with each class lecture. Some of these papers will be chosen by Prof. Della Valle for presentation to the class.
Final exam: 15% (3 pts.): The final exam will be a two-hour exam which tests the students overall understanding of material the course.

The grade for Prof. Pavesi's portion of the course will be based on class attendance and participation (50%) and in class group presentation (50%).

Class times: Tuesdays from 14 to 17. Last 4 classes are from 14 to 18 to allow for guest speakers, in class activities/experiments and group presentations.
Class dates: Feb 26, March 5, 12, 19, 26, April 2, April 9, April 16, May 7, 14, 21, 28.
Group presentations: May 21, 28
Office hours: Tuesdays from 13 to 14

Attending students:
Attending students are strongly urged to take the final exam on the first available exam date following the end of classes (primo appello) when all of the course material is fresh in their minds but may choose to take the exam on the second available exam date (secondo appello). Beyond those dates, students who have not completed the course requirements will be considered to be non-attending and required to submit to the corresponding grading guidelines for non-attending students (see below).

Non attending students (please read these instructions carefully):
Due to the nature and structure of this course, students are strongly discouraged from following this course if they cannot attend classes. However, those students for whom this class is a degree requirement and who cannot attend class for acceptable reasons, can fulfill the course requirements by completing the following:

1. A three-hour written non-attending student exam based on comprehensive knowledge of:

All of the material (lecture slides, notes and readings) posted on MY LIUC for the course. For materials relating to the workshop portion of the course on lobbying strategy the non-attending student should contact Prof. Pavesi directly.

The contents of the textbook Luis Cabral, Introduction to Industrial Organization, MIT Press, 2000. The exam for non-attending students will also include questions aimed at assessing the student’s preparation in applied microeconomics and industrial organization.

2. Two individual research papers: the first on a topic relating to Prof. Della Valle’s portion of the course and the second relating to the lobbying portion of the course.

Non-attending students should contact Profs. Della Valle (a.dellavalle@liuc.it) and Pavesi (fpavesi@liuc.it) regarding the nature, scope and choice of the paper topics. The individual papers are in lieu of the group projects for attending students.

Note: Students for whom the course is not a degree requirement will be permitted to take the course on a non-attending basis only upon permission of Prof. Della Valle who must be contacted before the course is accepted in their study plan.

Grading for non-attending students will be determined as follows:
50% final exam (15 points). The final exam is a 3-hour written exam consisting of questions from Prof. Della Valle’s section as well as from Prof. Massa’s lobbying portion of the course.
50% papers (15 points of which 9 for Prof. Della Valle’s paper and 6 for Prof. Massa’s paper).