Industrial Economics gives insights into how firms operate their activities as well as their motivation. It also considers firms of all sizes from local to multinational industries. In industrial economics cartels are common and helps in regulating prices due to competition.

Cartels: Industrial economics

Cartels are competitors in the same industry. They aim to reduce the competition by controlling the price in agreement with one another. Cartels use different tactics ,for example, reduction of supply, price-fixing, collusive bidding, and market carving. In most cases, cartels are considered illegal. The interference by cartels hurts consumers particularly through increase of prices and lack of transparency. Does the Competition Authority need to follow up Cartels? In addition, discuss theoretically the conflict of interests of a Cartel. Give examples of Cartels and leniency programs that have managed to break them.

Merger Paradox : Industrial economics

Mergers are very profitable and in many cases improves the overall welfare. Merged firms operate as independent subsidiaries. Firms receive subsidies on basis of their performance. Discuss the Merger Paradox and how the Salop Circular Model tries to solve it. Further, bring empirical evidence in favor of the Merger Paradox. Importantly, find an example of a merger that is both efficient and socially desirable.

Innovations in firms: Industrial economics

Can a firm innovate too much? Discuss the issue using appropriate models. In addition, try to give examples from real life and discuss relevant literature. I am going to send you 3 folders containing files with sources, PowerPoints and a simple brief for each question. As I cannot attach these folders to the ‘additional materials’ section I will send them once I have paid for the essay. Please use as many sources as possible from the list, I do however understand if you cant access certain ones.

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