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KAFP 3350 - Public Economics - Level 2

Type d'enseignement : Lecture and tutorials

Semester : Autumn 2019-2020

Number of hours : 36

Language of tuition : English, French



Course Description

Why does the state need to intervene in markets? The course starts by reviewing the view of the world under perfect competition, where the invisible hand is at work. In this world, there is no room for intervention. The course will then explore various causes of departures from this view, the so called market failures. The first category of failures finds its root in concentrated markets, where firms have excessive power. These environments are investigated through the lenses of game theory. The second category is linked to informational problems, such as adverse selection and moral hazard. These issues were of high relevance in the recent financial crisis, and are important to understand policy in many other economic situation, ranging from healthcare markets to trade. The third category covers environments where markets are absent (such as those for polluting rights, which were recently introduced in Europe) and that gives rise to externalities. The course will explore possible solutions to these issues in connection to public policy (e.g., antitrust, taxation and labor laws). The course will be strongly grounded in practical examples, including case studies and newspaper articles.


FIORETTI, Michele (Assistant Professor)

Pedagogical format

The course will be delivered through 12 lectures. Students are expected to work in group.

Course validation

The course will be evaluated on the basis of a final exam (50%) and a group project (50%). The group projects (done in groups of 3-4 of members) will study a market failure in practice and what solutions could be proposed to solve it.


Readings will be assigned weekly and students are expected to be on top of the course material and to actively participate to the lectures.

Required reading

Hindriks, J., & Myles, G. D. (2013). Intermediate public economics. MIT press