Econ 8602-Industrial Organization
Dept. of Economics
University of Minnesota
Spring 2023
Thomas J. Holmes
4-135 Hanson
Hall
holmes@umn.edu
Course home page: http://www.econ.umn.edu/~holmes/class/2023s8602
Description: Econ 8602 is the second
course in the industrial organization field sequence. The course
requirements include a final exam and two homework sets.
Various Topics and Papers (this list will be updated)
Topic 1: Dynamic
Oligopoly,
Background References
Aguirregabiria, Victor, and Aviv Nevo
“Recent
Developments in Empirical IO: Dynamic Demand and Dynamic Games,” with Aviv Nevo. Advances in Economics and Econometrics: Theory and
Applications. Tenth World Congress of the Econometric Society
Arcidiacono, Bayer, Blevins, and Ellickson, “Estimation of
Dynamic Discrete Choice Models in Continuous Time with an Application to Retail
Competition, ReStud
Bajari, Patrick, C. Lanier Benkard
and Jonathan Levin, “Estimating
Dynamic Models of Imperfect Competition,” Econometrica
Vol. 75, No. 5 (Sep., 2007) (pp. 1331-1370)
Doraszelski, Ulrich and Ariel Pakes, A Framework for Applied Dynamic Analysis in IO,", Mark Armstrong and Robert Porter (eds.), Handbook of Industrial Organization, Volume 3, Chapter 30, Pages 1887-1966 (2007).
Maskin, Eric and Jean Tirole (1988), “A Theory of Dynamic Oligopoly I: Overview and Quantity Competition'' and “A Theory of Dynamic Oligopoly II: Price Competition, Kinked Demand Curves, and Edgeworth Cycles,'' Econometrica 56, 549-599.
Gowrisankaran G. and T. Holmes, “Mergers and the
Evolution of Industry Concentration: Results from the Dominant Firm Model,” Rand,
Autumn, 2004. Link
(Note, while I don’t discuss the merger analysis in this paper, the special
case of the model of this paper with no mergers is a close cousin to the model
discussed in class.)
Guerre, Emmanuel, Perrigne Isabelle, and Vuong Quang. "Optimal Nonparametric Estimation of
First-Price Auctions." Econometrica 68, no.
3 (2000): 525-74.
Doraszelski, Ulrich, Gregory Lewis, and Arial Pakes, “Just
starting out: Learning and equilibrium in a new market,” forthcoming AER,
March 2017
Pakes, Ariel, “Dynamic
Games with Asymmetric Information: Experience Based Equilibria, Lecture
Notes.
Asker J, Fershtman C, Jeon J, Pakes A. A Computational Framework
for Analyzing Dynamic Procurement Auctions: The Market Impact of
Information Sharing. Working Paper.
Mitsuru
Igami,
Kosuke Uetake, Mergers,
Innovation, and Entry-Exit Dynamics: Consolidation of the Hard Disk Drive
Industry, 1996–2016, The Review of Economic Studies, Volume 87, Issue 6,
November 2020, Pages 2672–2702, https://doi.org/10.1093/restud/rdz044
Mitsuru Igami, Takuo Sugaya,
Measuring the Incentive to Collude: The Vitamin Cartels, 1990–1999, The Review
of Economic Studies, 2021;, rdab052, https://doi.org/10.1093/restud/rdab052
Recommended: Work
through notes on single-agent
dynamic models (and part 2)
of Matt Shum’s (CalTech) course “Empirical Methods
for Industrial Organization”
Topic 2: Size
Distribution of Firms
Lucas, Robert “On the Size Distribution of Business Firms,” Bell Journal, 1978, 508-523
Hopenhayn, Hugo, “Entry, Exit, and firm Dynamics in Long Run Equilibrium,” Econometrica Vol. 60, No. 5 (Sep., 1992), pp. 1127-1150
Eaton and Kortum, “Technology, Geography, and Trade, Econometrica, 70(5), 2002, 1741-1779. Link
Andrew B. Bernard; Jonathan Eaton; J. Bradford Jensen; Samuel Kortum, “Plants and Productivity in International Trade The American Economic Review, Vol. 93, No. 4. (Nov., 2003), pp. 1268-1290. Link
Holmes, T. J. and J. J. Stevens, "An Alternative Theory of the
Plant Size Distribution, with Geography and Intra- and International Trade,”
with John Stevens, Journal of Political
Economy, Vol. 122, No. 2 (April 2014), pp. 369-421 (see also Autor, Dorn, Hanson (AER 2013)
and Pierce
and Schott (AER 2016)
Ryan Decker, John Haltiwanger, Ron S Jarmin, and Javier Miranda, “The Secular Decline
in Business Dynamism in the U.S., 2014 working paper.“
Argente David, Sara Moreira, Ezra Oberfield,
and Venky Venkateswaran, Scalable
Expertise, July 2020
Topic 3: Market
Power
DeLoecker, Goldberg, Khandelwal and N. Pavcnik,
Prices,
Markups, and Trade Reforms, Econometrica
DE LOECKER, J., AND F. M. P. WARZYNSKI (2012): “Markups and
Firm-level Export Status,” American Economic Review, 102(6), 2437–2471.
DeLoecker, Jan Jan
Eeckhout, and Gabriel Unger “The Rise of
Market Power and the Macroeconomic Implications,” QJE, 2020 Issue 2
Yurukoglu, Ali, Lanier Benkard
and Anthony Lee Zhang, Concentration in
Product Markets, February 2021
DeLoecker, Jan and Jan Eeckhout,
“Global Market
Power,” Aug 2017 manuscript
Autor, D., D. Dorn, L. Katz, C. Patterson, J. Van Reenan,
“The Fall of the Labor Share
and the Rise of Superstar Firms,” May 2019 manuscript.
Nathan H. Miller, and Matthew C. Weinberg, “Understanding
the Price Effects of the MillerCoors Joint Venture,” Econometrica
Dec 2017.
Asker, John, Jan De Loecker, and Allan
Collard-Wexler, “Market
Power, Production (Mis)Allocation and OPEC, forthcoming AER
Igami, Mitsuru, and Kosuke Uetake,
“Mergers,
Innovation, and Entry-Exit Dynamics: Consolidation of the Hard Disk Drive Industry,
RESTUD 2019.
Topic 4: Theory of the Firm/Production Networks...
Felix Tintelnot, Ken Kikkawa,, Magne Mogstad, Emmanuel Dhyne, “Trade
and Domestic Production Networks,” manuscript, April 2019
Enghin Atalay, Ali Hortaçsu,Mary Jialin Li Chad Syverson, “HOW WIDE IS THE
FIRM BORDER?” Quarterly Journal of Economics Aug 2019
Bernard, Andrew
Andrea Moxnes, and Yukiko Saido,
“Production Networks,
Geography and Firm Performance, forthcoming JPE
Teresa C. Fort; Technology and Production
Fragmentation: Domestic versus Foreign Sourcing, The Review of Economic
Studies, Volume 84, Issue 2, 1 April 2017, Pages 650–687,
Laura Alfaro, Pol Antras, Davin Chor, and Paola Conconi, Internalizing
Global Value Chains: A Firm-Level Analysis forthcoming JPE
Antràs, Pol, Teresa C. Fort, and Felix Tintelnot. 2017. "The Margins of
Global Sourcing: Theory and Evidence from US Firms." American Economic
Review, 107 (9): 2514-64
Scientific
Background on the Sveriges Riksbank
Prize in Economic Sciences in Memory of Alfred Nobel 2016, OLIVER HART AND
BENGT HOLMSTRÖM: CONTRACT THEORY
Acemoglu, D.,
Griffith, R., Aghion, P. and Zilibotti, F. (2010),
VERTICAL INTEGRATION AND TECHNOLOGY: THEORY AND EVIDENCE. Journal of the
European Economic Association, 8: 989–1033.
doi:10.1111/j.1542-4774.2010.tb00546
Holmstrom, B.R. and
P. Milgrom, "The Firm as an Incentive Device," American Economic
Review, Sept. 1994
Edmans, Alex, and
Xavier Gabaix. 2016. "Executive
Compensation: A Modern Primer." Journal of Economic Literature, 54(4):
1232-87.
Lorenzo Caliendo,
Ferdinando Monte, and Esteban Rossi-Hansberg, “The Anatomy of French
Production Hierarchies,” August 2015, Journal of Political Economy, 123:4,
809-852
Gregory S. Crawford,
Robin S. Lee, Michael D. Whinston, Ali Yurukoglu, The Welfare
Effects of Vertical Integration in Multichannel Television Markets,”,ECONOMETRICA: MAY 2018, VOLUME 86, ISSUE 3 p. 891-954
Allan Collard-Wexler,
Gautam Gowrisankaran, Robin Lee "'Nash-in-Nash'
Bargaining: A Microfoundation for Applied Work,"
(with) September 2017 Forthcoming, Journal of Political Economy)
Johannes Boehm and
Ezra Oberfield, “Misallocation
in the Market for Inputs:Enforcement and the
Organization of Production, Quarterly Journal of Economics, 2020,”
Topic 5: Product
Differentiation, Price Competition, Efficiency of Entry
Anderson, Simon P, André De Palma, and Jacques-François Thisse, “Demand
for Differentiated Products, Discrete Choice Models, and the Characteristics
Approach,” Review of Economic Studies
(1989) 56 (1): 21-35
Simon P. Anderson and Andre de Palma, “The Logit as Model of
Product Differentiation,” Oxford
Economic Papers, New Series, Vol. 44, No. 1 (Jan., 1992), pp. 51-67
Broda, C. and D. Weinstein, "Globalization and the Gains from
Variety," Quarterly Journal of
Economics Volume 121, Issue 2 - May 2006
Feenstra, Robert C and David E. Weinstein, “GLOBALIZATION,
MARKUPS AND U.S. WELFARE,” Journal of Political Economy August 2017
Caplin, A., & Nalebuff, B. (1991). Aggregation and Imperfect Competition:
On the Existence of Equilibrium. Econometrica,
59(1), 25-59.
Gowrisankaran, Gautam, Aviv Nevo and Robert Town. 2015. "Mergers When
Prices Are Negotiated: Evidence from the Hospital Industry." American
Economic Review, 105(1): 172-203
Mankiw, N. Gregory;
Michael D. Whinston, “Free Entry and Social
Inefficiency,” The RAND Journal of
Economics, Vol. 17, No. 1. (Spring, 1986), pp. 48-58. Link
Nocke, Volker, and Nicolas Schultz, “Multiproduct Firm Oligopoly: An
Aggregative Games Approach, manuscript, Sept 2016
Berry, Steven and
Joel Waldfogel, “Free Entry and Social Inefficiency
in Radio Broadcasting,” The RAND Journal of Economics Vol. 30, No. 3
(Autumn, 1999), pp. 397-420 (24 pages)
Seim, Katja. “An
Empirical Model of Firm Entry with Endogenous Product‐Type
Choices,” RAND Journal of Economics 37(3), 2006.
Topic 6: Pricing
Coey, Dominic, Bradley J. Larsen, and Brennan C. Platt. 2020. "Discounts and Deadlines in Consumer Search."
American Economic Review, 110 (12): 3748-85.
Bradley J Larsen, The Efficiency
of Real-World Bargaining: Evidence from Wholesale Used-Auto Auctions, The Review
of Economic Studies, Volume 88, Issue 2, March 2021, Pages 851–882,
Nevo, A., Turner, J. L. and Williams, J. W.
(2016), Usage-Based
Pricing and Demand for Residential Broadband. Econometrica,
84: 411–443. doi:10.3982/ECTA11927
DellaVigna and Gentzkow, Uniform
Pricing in US Retail Chains,Quarterly Journal of Economics, Volume 134, Issue 4, November 2019, Pages
2011–2084
Adams and Williams, Zone
Pricing in Retail Oligopoly, with Brian M Adams forthcoming, American
Economic Journal: Microeconomics Cowles Foundation Discussion Paper No. 2079
Topic 7: Productivity, Scale Economies
Shapiro, Joseph S.,
and Reed Walker. 2018. "Why Is Pollution
from US Manufacturing Declining? The Roles of Environmental Regulation,
Productivity, and Trade." American Economic Review, 108 (12): 3814-54.
Ahlfedlt, Gabriel, Steven Redding, Daniel Sturm
and Nikolaus Wolf,” The Economics of Density: Evidence from the
Berlin Wall ,” Econometrica, 83(6), 2015,
2127-2189
Diamond, Rebecca.
2016. "The
Determinants and Welfare Implications of US Workers' Diverging Location Choices
by Skill: 1980-2000." American Economic Review, 106 (3): 479-524.
Heblich, S., S. Redding, and D. Sturm, “The
Making of the Modern Metropolis: Evidence from London, Sept 2017
Fajgelbaum, Pablo D., Eduardo Morales, Juan Carlos
Suárez Serrato, and Owen Zidar, “State Taxes and
Spatial Misallocation: March 2016.
Arkolakis and Allen, Trade and the Topography of
the Spatial Economy, Quarterly Journal of Economics, 2014
Klaus Desmet, Dávid Krisztián
Nagy, and Esteban Rossi-Hansberg, The Geography of Development,
Forthcoming in the Journal of Political Economy
Hsieh, Chang-Tai and
Enrico Moretti, “HOUSING
CONSTRAINTS AND SPATIAL MISALLOCATION, NBER working paper 21154, revised
May 2017
Recommended reference
for those with an interest in urban and regional economics:
Handbook of Regional and Urban Economics,
Volume 5, Pages 1-1653 (2015),Handbook of Regional and Urban Economics,Edited by Gilles Duranton,
J. Vernon Henderson and William C. Strange
Topic 8: Taxi Economics
Buchholz, N. “Spatial
Equilibrium, Search Frictions and Efficient Regulation in the Taxi Industry,”
working paper, August 2016;
Frechette, G. A Lizzzeri, and T. Salz,.”Frictions
in a Competitive Regulated Market: Evidence from Taxis,” working paper, Nov
2016
Hall, J., J. Horton, and D. Knoepfle, “Labor Market Equilibration:Evidence from Uber,” working paper 2017
G. Brancaccio, M Kalouptsidi, and T. Papgeorgiou, “Geography,
Search Frictions and Endogenous Trade Costs,” working paper, 2017
Topic 9: Selected Job Maket
Papers from Last Year
Marone, Victoria and Adrienne Sabety,
“Should
There be Verical Choice in Health Insurance Markets,” working paper, July 2020
Almagro, Milena and Tomás Domínguez-Iino., Location
Sorting And Endogenous Amenities: Evidence From Amsterdam, August 2020.
Topic 10: Standardization versus Customization
Kloback, Ben, August 2020.. One
Size Fits All? The Value of Standardized Retail Chains
Quan, T. W. and K. R. Williams (2018). Product variety, across-market
demand heterogeneity, and the value of
online retail. The RAND Journal of Economics 49 (4), 877–913.
Holmes, T.J., “The Diffusion of Wal-Mart and Economies of Density,” Econometrica, Vol. 79, No. 1, January, 2011,
253-302
Holmes, T. J. and E. Singer, "Indivisibilities
in Distribution," NBER Working Paper 24525, April 2018.
Topic 11: Tariffs and Passthrough
Alberto Cavallo, Gita Gopinath, Brent Neiman, Jenny Tang, “Tariff
Passthrough at the Border and at the Store: Evidence from US Trade Policy”
NAKAMURA, EMI and DAWIT ZEROM, “Accounting for Incomplete
Pass-Through,” The Review of Economic Studies Vol. 77, No. 3 (July 2010),
pp. 1192-1230 (39 pages
Flaaen, Hortacsu, and Tintelnot, “The
Production Relocation and Price Effects of US Trade Policy: The Case of Washing
Machines” American Economic Review, July 2020.
Topic
12: Common Ownership
Matthew Backus,
Christopher Conlon, and Michael Sinkinson, “Common Ownership in
America: 1980–2017, Forthcoming at AEJ: Micr
Backus, Matthew,
Christopher Conlon, and Michael Sinkinson. 2019. “The Common Ownership
Hypothesis: Theory and Evidence.” Brookings Working Paper.