A Helicopter Tour of Some Underlying Issues in Empirical Industrial Organization

This review considers conceptual issues underlying empirical work on markets. It is divided in three parts. The first part reviews the analysis of demand and equilibrium in retail markets and then considers recent advances in the analysis of markets that require different assumptions: markets where...

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Published in:Annual review of economics 2021-01, Vol.13 (1), p.397-421
Main Author: Pakes, Ariel
Format: Article
Language:English
Subjects:
current issues
empirical analysis
Industrial enterprises
Industrial organization
JEL D4
JEL L1
JEL L4
JEL L5
Markets
Moral hazard
Production
progress
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description This review considers conceptual issues underlying empirical work on markets. It is divided in three parts. The first part reviews the analysis of demand and equilibrium in retail markets and then considers recent advances in the analysis of markets that require different assumptions: markets where adverse selection and moral hazard may be important, vertical markets with bargaining, and markets wherein a centralized allocation mechanism replaces prices. The second part considers the analysis of cost and production. It reviews the simultaneity and selection issues in production function estimation and then considers the distinction between revenue- and quantity-generating functions and its implications for the analysis of markups, as well as the empirical analysis of fixed costs and its implications for the analysis of product repositioning. The review concludes by considering issues that arise due to the complexity of the empirical analysis of market dynamics and appropriate ways of dealing with them.
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subjects current issues
empirical analysis
Industrial enterprises
Industrial organization
JEL D4
JEL L1
JEL L4
JEL L5
Markets
Moral hazard
Production
progress
title A Helicopter Tour of Some Underlying Issues in Empirical Industrial Organization
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