Empirical Industrial Organization
Professors:
Andras Niedermayer
Chènes 1, office B136
e-mail: andras.niedermayer@cyu.fr
Régis Renault
Chènes 1, office A106
e-mail: regis.renault@cyu.fr
Informations on the course :
Master 2 economic analysis/ESSEC Ph.D. 1st and 2nd year
Course load: 27 hours, 9 sessions; 3 hours per session
Overview:
In this course we will cover mainstream empirical industrial organization methods. The main goal is to provide a set of tools necessary to undertake empirical analyses typically performed in Industrial Organization. Most methods that will be reviewed in this course are not limited to empirical IO, but can be used in a variety of different fields (such as health, finance, and environmental economics).
Prerequisites
Microeconomics, Econometrics
Course Objectives:
The objective of the course is to provide the students with an appropriate understanding of key empirical industrial organization models.
After having attended the classes, the students will:
- have an overview of seminal and recent papers in empirical IO
- understand core empirical methods
- understand the data requirements for each methods to be implemented
· have a working knowledge of Python
Evaluation
Homework assignments: 50%
Final evaluation: 50%
Course outline
Chapter 1. Monopoly and price discrimination. SLIDES.
Chapter 2. Aucton theory. SLIDES
Chapter 3. Discrete choice random utility models. SLIDES
Chapter 4. Estimation of demand and marginal cost.
Chapter 5. Estimation of bargaining models.
Chapter 6. Auction econometrics.
Chapter 7. Econometrics of price discrimination.
Readings
Monopoly and price discrimination.
Tirols, J. (1988): The theory of industrial organization. MIT Press.
Laffont, J.J., and D. Martimort (2002), The theory of incentives. Princeton University Press.
Mussa, M., & Rosen, S. (1978). Monopoly and product quality. Journal of Economic theory, 18(2), 301-317.
Auction theory
Krishna, V. (2009), Auction theory. Academic Press.
Discrete choice random utility models
Anderson, S.P., A. de Palma and J. Thisse (1992): Discrete choice models of product differentiation. MIT Press.
Estimation of demand and marginal costs
Steven T. Berry, “Estimating Discrete-Choice Models of Product Differentiation,” Rand Journal of Economics, 25, 242-262, 1994.
Berry, S., Levinsohn, J., & Pakes, A. (1995). Automobile prices in market equilibrium. Econometrica: Journal of the Econometric Society, 841-890.
Nevo, A. (2000). Mergers with differentiated products: The case of the ready-to-eat cereal industry. The RAND Journal of Economics, 395-421
Berry, S., & Pakes, A. (2007). The pure characteristics demand model. International Economic Review, 48(4), 1193-1225
Goldberg, P. K. (1995). Product differentiation and oligopoly in international markets: The case of the US automobile industry. Econometrica: Journal of the Econometric Society, 891-951
Nevo, A. (2011). Empirical models of consumer behavior. Annu. Rev. Econ., 3(1), 51-75.
Estimation of bargaining models
Crawford, Gregory S., and Ali Yurukoglu. 2012. “The Welfare Effects of Bundling in Multichannel Television Markets.” American Economic Review 102 (2): 643–85.
Dafny, Leemore S. 2010. “Are Health Insurance Markets Competitive?” American Economic Review 100 (4): 1399–431
Ho, Katherine, Justin Ho, and Julie Holland Mortimer. 2012. “The Use of Full-Line Forcing Contracts in the Video Rental Industry.” American Economic Review 102 (2): 686–719.
Horn, Henrick, and Asher Wolinsky. 1988. “Bilateral Monopolies and Incentives for Merger.” RAND Journal of Economics 19 (3): 408–19.
Grennan, M. (2013). Price discrimination and bargaining: Empirical evidence from medical devices. American Economic Review, 103(1), 145-77.
Auction econometrics
Paarsch, Harry J., and Han Hong. "An introduction to the structural econometrics of auction data." MIT Press Books 1 (2006).
Guerre, Emmanuel, Isabelle Perrigne, and Quang Vuong. "Optimal nonparametric estimation of first‐price auctions." Econometrica 68.3 (2000): 525-574.
Krasnokutskaya, Elena. "Identification and estimation of auction models with unobserved heterogeneity." The Review of Economic Studies 78.1 (2011): 293-327.
Econometrics of price discrimination
Luo, Y., Perrigne, I., & Vuong, Q. (2018). Structural analysis of nonlinear pricing. Journal of Political Economy, 126(6), 2523-2568.