Economics of Market Regulation

Master Degree in Competition and Market Regulation

Master Degree in Health Economics

9 cfu

Teaching period

First semester: September 2020 - December 2020

Class hours

Tuesday: 14.00-16.00, Room 2C VI floor -- Link to the live straming (zoom platform)
Wednesday: 16.00-18.00, Room 2C VI floor -- Link to the live straming (zoom platform)
Thursday: 14.00-16.00, Room 2C VI floor -- Link to the live straming (zoom platform)

Office hours
During the first semester:
Tuesday: 16.00-18:00 (by appointment)
Wednesday: 14.00-16.00 (by appointment)
During the second semester: please, contact by e-mail

Knowledge achieved
This course builds upon issues that are commonly dealt with in first-level Industrial Organization courses. The course concerns regulatory policies that are commonly applied in developed Countries. The aim is to provide students with tools to understand and design optimal ex ante and ex post public interventions in the economy at the sectorial level, to investigate the rationale for such interventions, the complex relationship between Regulators and regulated companies and the possibility for these interventions to overcome market failures.

Skills achieved
Students will learn how to design tariffs and other types of regulatory interventions, as well a how to define markets for the purpose of applying regulatory and competition policies. They will gain awareness about the potential for these interventions to increase social welfare and about the internal knowledge firms have to develop in order to comply with regulatory and competition rules. At the end of the course, students will have good knowledge of advanced industrial economics models applied to regulatory issues and will be able to perform their own analysis concerning any regulatory intervention.


The course is designed for students with good knowledge of intermediate microeconomics and macroeconomics.


Market Failures and Regulation

Efficiency and Technical Progress

The Economic Theory of Regulation

Theory of Natural Monopoly

Price Regulation in Natural Monopoly

Franchise Bidding

Public Enterprise

Nonprofit Firms (with an application to the Health Care system)

Case Studies (Electricity, Highways, Health, Public vs Private firms)

Dynamic Issues in Natural Monopoly Regulation

The Regulation of Potentially Competitive Markets

Introduction to Social Regulation

Environmental Regulation

Safety Regulation and Patents

The Health Economics of Bads and Regulation

Pharmaceutical Regulation

Cost-Benefit Analysis (with an application to the Health system)

Suggested Readings

Economics of Regulation and Antitrust, W. Kip Viscussi, Joseph E. Harrington and John M. Vermon, Fourth Edition, MIT Press (chapters 1-2-3-4-10-11-12-13-14-15-16-19-20-21-22-24).

Available at Biblioteca Federico Caffè (

Public Finance and Public Choice: Analytical Perspectives. John Cullis and Philip Jones, third edition, Oxford University Press (chapters 1-2-5).
Available at Biblioteca Federico Caffè (

The Economics of Health and Health Care, Sherman Folland, Allen C. Goodman, Miron Stano, 8th Edition, Routledge (chapters 4-13-23).

Available at Biblioteca Federico Caffè (

Pina, Vicente, and Lourdes Torres (2001). "Analysis of the Efficiency of Local Government Services Delivery. An Application to Urban Public Transport", Transportation Research Part A: Policy and Practice 35, no. 10, 929–944. Kathryn L. Dewenter and Paul H. Malatesta (2001). "State-Owned and Privately Owned Firms: An Empirical Analysis of Profitability, Leverage,and Labor Intensity", American Economic Review.

Davies, D. G. (1971). "The efficiency of public versus private firms, the case of Australia's two airlines", The Journal of Law and Economics, 14(1), 149-165.

WHO (2018) “World Health Statisticts 2018”.

Hollingsworth, Bruce (2008). "The Measurement of Efficiency and Productivity of Health Care Delivery". Health Economics 17 (10).

Petersen, O., Hjelmar U., Vrangbæk K. and la Cour L. (2011). "Effects of contracting out public sector tasks: A research-based review of Danish and international studies from 2000-2011".

Knyazeva, Anzhela, Diana Knyazeva, and Joseph E. Stiglitz (2013). "Ownership Change, Institutional Development and Performance". Journal of Banking & Finance 37, no. 7: 2605–2627.

Bacchiocchi, E., Massimo Florio, and Marco Gambaro (2011). "Telecom Reforms in the EU: Prices and Consumers’ Satisfaction". Telecommunications Policy 35, no. 4: 382–396.

Tacke, Tilman, and Robert Waldmann (2011). "The relative efficiency of public and private health care".

Lecture slides and additional readings are provided during the course.

To get this additional material, please, send me an e-mail.

Topics and readings may be added or deleted as the term progresses.

The final program will be available at the end of the course.


Attending Students:

Paper presentation (40% of final mark). Students are required to present a paper to the class. The paper will be assigned at the beginning of the course.

(Virtual) Class work (10% of final mark). At the end of each class students are required to write (half page) or discuss (2 minutes) the main message of the lecture.

Final exam (50% of final mark). Students are required to answer two questions among the four that are proposed and that concern only the topics covered during the course. The final exam is written and will last 90 minutes.

Non-Attending Students:

Final exam. Students are required to answer to four questions. The final exam is written.