Demand and Pricing in Industrial Organization (ECO-AD-EMPIRICIO)

ECO-AD-EMPIRICIO

Description

Demand and Pricing in Industrial Organization

Professor Marc Rysman
Overview: This course introduces students to empirical methods in Industrial Organization focusing on the demand and pricing, integral building blocks in all of the field. The main goal is to familiarize students with the important topics in the literature today and to put students in a position to do their own research in this area.
Requirements:
1. There will be one problem sets based on the readings. They will be computer and data intensive. Make sure you have access to the relevant computer programs, such as SAS or Stata, and Gauss, Matlab, R, Julia, or
Python.
2. There will be a class discussion in which I assign a paper and a set of questions about the paper and you will come to class with answers to every question. We will discuss your answers in class. You will be graded on your participation in the discussion.
Final grades are weighted as follows:
Problem set 60%
Class participation 40%
Readings (first half of semester): Readings will be taken primarily from the list below. My list focuses on papers that we will read and is not comprehensive of the field. Not all papers are “classics” and many classics have been omitted. I will also provide a day-to-day schedule of readings.
Textbooks and Overview Articles
Tirole, J. (1988). The Theory of Industrial Organization. MIT Press,
Cambridge.
Martin, S. (2002). Advanced Industrial Economics. Blackwell Publishers.
Belleflamme, P. and Peitz, M. (2010). Industrial Organization: Markets
and Strategies. Cambridge University Press.
Poirier, D. (1995). Intermediate Statistics and Econometrics: A
Comparative Approach. MIT Press.
1Davidson, R. and Mackinnon, J. G. (2003). Econometric Theory and
Methods. Oxford University Press.
Wooldridge, J. M. (2010). Econometric Analysis of Cross Section
and Panel Data. MIT Press, 2nd edition.
Cameron, A. C. and Trivedi, P. K. (2005). Microeconometrics: Methods
and Applications. Cambridge University Press.
Reiss, P. and Wolak, F. (2007). Structural econometric modeling:
Rationales and examples from industrial organization. In Heckman,
J. and Leamer, E., editors, Handbook of Econometrics Vol.
6A. North-Holland.
Ackerberg, D. A., Benkard, C. L., Berry, S., and Pakes, A. (2007).
Econometric tools for analyzing market outcomes. In Heckman,
J. and Leamer, E., editors, Handbook of Econometrics Vol. 6,
chapter 15. North Holland.
Train, K. (2009). Discrete Choice Methods with Simulation. Cambridge
University Press, 2nd edition.
Shum, M. (2016). Econometric Models for Industrial Organization.
World Science Lecture Notes in Economics. World Scientific.
Paarsch, H. J. and Golyaev, K. (2016). A Gentle Introduction to
Effective Computing in Quantitiave Research: What Every Research
Assistant Should Know. MIT Press.
Cross-Industry Studies
Martin, S. (2002). Advanced Industrial Economics. Blackwell Publishers.
Demand and Market Power
Bresnahan, T. (1987b). Empirical studies of industries with market
power. In Schmalensee, R. and Willig, R., editors, Handbook of
Industrial Organization, volume 2, chapter 7, pages 10011–10158.
North Holland, Amsterdam.
Ashenfelter, O. and Sullivan, D. (1987). Nonparametric tests for
market structure: An application to the cigarette industry. Journal
of Industrial Economics, 35:483–498.
Anderson, S., De Palma, A., and Thisse, J.-F. (1992). Discrete
Choice Theory of Product Differentiation. MIT Press.
Goldberg, P. K. (1995). Product differentiation and oligopoly in
international markets: The case of the U.S. automobile industry.
Econometrica, 63:891–951.
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Bresnahan, T. (1987a). Competition and collusion in the American
auto industry: The 1955 price war. Journal of Industrial
Economics, 35:457–482.
Berry, S. (1994). Estimating discrete choice models of product differentiation.
RAND Journal of Economics, 25:242–262.
Berry, S., Levinsohn, J., and Pakes, A. (1995). Automobile prices in
market equilibrium. Econometrica, 63:841–890.
Berry, S., Levinsohn, J., and Pakes, A. (1999). Voluntary export
restraints on automobiles: Evaluating a strategic trade policy.
American Economic Review, 89:400–430.
Ackerberg, D. A. and Rysman, M. (2005). Unobservable product
differentiation in discrete choice models: Estimating price elasticities
and welfare effects. RAND Journal of Economics, 36:771–
788.
Nevo, A. (2000). A practitioner’s guide to estimation of random
coefficients logit models of demand. Journal of Economics &
Management Strategy, 9:513–548.
Nevo, A. (2001). Measuring market power in the ready-to-eat breakfast
cereal industry. Econometrica, 69:307–342.
Petrin, A. (2002). Quantifying the benefits of new products: The
case of the minivan. Journal of Political Economy, 110:705–729.
Gentzkow, M. (2007). Valuing new goods in a model with complementarity:
Online newspapers. American Economic Review,
97:713–744.
Fan, Y. (2013). Ownership consolidation and product characteristics:
A study of the U.S. daily newspaper market. American
Economic Review, 103:1598–1628.
Judd, K. L. and Su, C.-L. (2012). Constrained optimization approaches
to estimation of structural models. Econometrica, 80:2213–
2230.
Berry, S. T. and Haile, P. A. (2016). Identification in differentiated
products markets. Annual Review of Economics, 8:27–52.
Gandhi, A. and Houde, J.-F. (2020). Measuring substitution patterns
in differentiated-products industries. Unpublished manuscript,
University of Wisconsin-Madison.
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Conlon, C. and Gortmaker, J. (2020). Best practices for differentiated
products: Demand estimation with pyBLP. RAND Journal
of Economics, 51:1108–1161.
Grieco, P. L. E., Murry, C., and Yurukoglu, A. (In Press). The evolution
of market power in the US automobile industry. Quarterly
Journal of Economics.
.
Productivity and Market Power
Christensen, L. and Greene, W. H. (1973). Economies of scale in
U.S. electric power generation. Journal of Political Economy,
84:655–675.
Olley, S. and Pakes, A. (1996). The dynamics of productivity in the
telecommunications equipment industry. Econometrica, 64:1263–
1297.
Levinsohn, J. and Petrin, A. (2003). Estimating production functions
using inputs to control for unobservables. Review of Economic
Studies, 70:317–342.
Ackerberg, D. A., Caves, K., and Frazer, G. (2015). Identification
properties of recent production function estimators. Econometrica,
83:2411–2451.
Doraszelski, U. and Jaumandreu, J. (2013). R&D and productivity:
Estimating endogenous productivity. Review of Economic
Studies, 80:1338–1383.
Holmes, T. J. (2011). The diffusion of Wal-Mart and economies of
density. Econometrica, 79:253–302.
Hsieh, C.-T. and Klenow, P. (2009). Misalloation and manufacturing
TFP in China and India. Quarterly Journal of Economics.
Asker, J., Collard-Wexler, A., and Loecker, J. D. (2014). Dynamic
inputs and resource (mis)allocation. Journal of Political Economy,
122:1013 – 1063.
De Loecker, J. and Warzynski, F. (2012). Markups and firm-level
export status. American Economic Review, 102(6):2437–71.
De Loecker, J. and Scott, P. T. (2022). Markup estimation using
production and demand data: An application to the US brewing
industry. Unpublished manuscript, New York University.
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Contracting and Asymmetric Information
Mortimer, J. (2008). Vertical contracts in the video rental industry.
Review of Economic Studies, 75:165–199.
Villas-Boas, S. B. (2007). Vertical relationships between manufacturers
and retailers: Inference with limited data. Review of Economic
Studies, 74:625–652.
Sieg, H. (2000). Estimating a bargaining model with asymmetric information:
Evidence from medical malpractice disputes. Journal
of Political Economy, 108:1006–1021.
Jin, G. and Leslie, P. (2003). The effect of information on product
quality: Evidence from restaurant hygiene grade cards. Quarterly
Journal of Economics, 118:409–451.
Chiappori, P.-A. and Salanie, B. (2000). Testing for asymmetric
information in insurance markets. Journal of Political Economy,
108:56–78.
Finkelstein, A. and McGarry, K. (2006). Multiple dimensions of private
information: Evidence from the long-term insurance market.
American Economic Review, 96:938–958.
Fang, H., Keane, M. P., and Silverman, D. (2008). Sources of advantageous
selection: Evidence from the medigap insurance market.
Journal of Political Economy, 116:303–350.
Crawford, G. S. and Yurukoglu, A. (2012). The welfare effects of
bundling in multi-channel television markets. American Economic
Review, 102:643–685.
Grennan, M. (2013). Price discrimination and bargaining: Empirical
evidence from medical devices. American Economic Review,
103:145–177.
Ho, K. and Lee, R. S. (2019). Equilibrium provider networks: Bargaining
and exclusion in health care markets. American Economic
Review, 109:473–522.
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