Econ 8601-Industrial Organization
Dept. of Economics
University of Minnesota
Fall 2017
Thomas J. Holmes
4-135 Hanson
Hall
612-625-4512
holmes@umn.edu
Course home page: http://www.econ.umn.edu/~holmes/class/2017f8601/index.html
Description: Econ 8601 is the
first course in the industrial organization field sequence. The course
requirements include a final exam and several homework sets.
Lecture and Reading Schedule
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, forthcoming 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
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: 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
Topic 2.5 Trade
Networks
Felix Tintelnot, Ken Kikkawa,, Magne Mogstad,
Emmanuel Dhyne, “Trade
and Domestic Production Networks,” manuscript, June 2017
Topic 3: 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.“
DeLoecker, Goldberg, Khandelwal and N. Pavcnik,
Prices,
Markups, and Trade Reforms, Econometrica
DeLoecker, Jan and Jan Eeckhout,
“The Rise of
Market Power and the Macroeconomic Implications,” 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 2017
manuscript.
Topic 4: Price Discrimination
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
Topic 5: 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 6: Productivity, Scale Economies
Ahlfedlt, Gabriel, Steven Redding, Daniel Sturm
and Nikolaus Wolf,” The Economics of
Density: Evidence from the Berlin Wall ,” Econometrica,
83(6), 2015, 2127-2189
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 5: Theory of the Firm
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