This course aims to help students understand why some business practices affect competition; how governments regulate the market to safeguard competition, stability and efficiency; and how business strategies should be formulated in dealing with the regulatory environment. Most governments attempt to maintain and regulate a competitive environment in the marketplace or use regulatory measures to achieve economic efficiency and other political objectives.

The course is an introduction to the role of government in markets where competitive equilibria “fail.” In this course we go beyond the strategic interaction of firms and concentrate on the interaction between firms and the government in the following settings: a firm as a regulated monopoly; a firm as a participant in a market regulated by the government; and a firm as an agent to provide goods and/or services financed by the government.

This course covers three areas in the economics of regulations: (i) how to regulate the market competition through the application of anti-trust law; (ii) how to regulate the monopolies through the practices of incentive regulation; and (iii) how to reduce systemic risk through financial regulation.

The course also encourages discovery learning, which takes place when students use the knowledge and skills they acquired from the lectures to discover, for themselves, practical solutions to problems on economics of regulations in real-life contexts.

The project presentation and examination will reflect their accomplishment in discovery and innovation.