Financial Markets

Sun 22 July 2018

Programme

8:45 Breakfast
11.00 Director’s Introduction and Academic Briefing
11:15 Stock Exchanges: The Perfect Market? (Michalis Rousakis)
12:15 Break, followed by Lunch at 12:30
1:15 Syndicate Discussion
2:15 Evaluating Investment Decisions: Assets and Option Values (Michalis Rousakis)
3:15 Syndicate Discussion
4:30 Ecological Risk  (Michalis Rousakis)
7.00 Curry and Croquet

Overview

Prices should reflect the relative costs and benefits of economic activity. Responding to prices, different economic actors (consumers, workers, managers, entrepreneurs, and so on) can be led to efficient outcomes. We have already seen that markets can fail when prices fail to incorporate spillovers. Prices can also be distorted when buyers and sellers exert significant market power, for instance, a monopolist can choose to restrict supply and drive prices and profits upwards. While this can be bad for overall efficiency, it can, of course, be good for those lucky enough to possess such market power. Today we begin by studying the exploitation of monopoly power. We also bring in the effects of increased competition and work out the relationship between competition and economic performance. The third lecture explores coordinated effects: when firms misuse their combined market power to raise prices. Needless to say excessive market power can be bad for firms as well as a concern for governments; after all, if your supplier is a monopolist then you may be held to ransom. We conclude the day with a lecture that highlights some issues in modern antitrust and competition law.

Michalis Rousakis – University of Oxford

Michalis is a Career Development Fellow at the Department of Economics and a Fellow of Merton College at the University of Oxford. Prior to Oxford, he completed his PhD in Economics at the University of Warwick in 2012 and spent two years as a Max Weber Fellow at the European University Institute in Florence afterwards. His research interests lie in Macroeconomics and Monetary Economics and his current research explores the interaction between the labour market and the housing market.