Economics 257, Fall 2002
The Economics of Industry, Regulation, and Firm Organizations
I
This page contains links to general course information
and to material related to Liran Einav's half of the course.
For material related to Susan Athey's half, please
click here.
People
Course Description and Reading List
Lecture Notes (for Liran Einav's half)
Module I: Differentiated Products
We will start
with an overview of the module, discuss the supply side modelling, and
then go over the estimation of demand system in product space. It would
be useful to read before class Aviv Nevo's teaching notes on the subject
(http://elsa.berkeley.edu/~nevo/demest1.pdf)
and the two Hausman papers that are on the reading list.
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Lectures 2+3 (Oct 15, Oct 17):
In these two lectures
we will cover the estimation of demand systems in characteristic space.
Useful reading before class would be the the Bresnahan paper, Berry (1994)
paper, and the Nevo (JEMS, 2000) paper, which is relatively easy to read.
The Berry, Levinsohn, and Pakes (1995) paper and the other Nevo paper are
also helpful, but may be more difficult to digest on a first path. If we
have time, we will also cover the Goldberg paper and the second paper by
Beery, Levinsohn, and Pakes.
The first half
(or more) of this class will feature a class discussion on the issues we
should think about when we choose an empirical methodology. The problem
set (due for this class) will be the basis for discussion. You should come
ready to talk! In the remaining time, we will briefly go over some suggested
extensions to the estimation models discussed in previous classes. Probably,
this will include the Berry-Pakes working paper (2002).
Module II: Entry, Market Structure,
and Non-Price Strategies
We will cover papers related to industry structure. We will begin with a quick review of Gibrat's Law and other
empirical regularities, and then cover two papers: Jovanovic (Econometrica 50(3), 1982) as an example for a theoretical model that captures the main regularities we observe
in the data, and Olley-Pakes (1996) as an example for a related empirical application.
We will discuss entry models and other empirical models of discrete games. Good background readings are the
Bresnahan and Reiss paper and the Berry (1995) paper which are both on the reading list.
We will go over various theories on entry deterrence, predatory pricing, and other strategic considerations.
We will discuss the difficulties associated with empirically testing these theories, as well as one attempt to do so - Gilbert-Lieberman (Rand 18(1), 1987).
Module III: Dynamics
We will get strated on dynamics with general vocabulary and two simple theoretical examples. It may be useful to
Go over Aghion et al (REStud, 1991) article on the reading list. Also, Pakes' summary posted on his web page
(http://post.economics.harvard.edu/faculty/pakes/papers/W8024.pdf)
is a good background read for the whole module.
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Lectures 9+10 (Dec 3, Dec 5)
We will finish single-agent dynamics by reviewing Pakes (1986) and Rust (1987). We will then move on to
multiple-agent models, first by briefly going over Hopenhayn (1992), and then introducing the concept of Markov Perfect Equilibrium by doing Maskin-Tirole (1986).
We will continue through the final lecture by going over Ericson-Pakes (1995), Pakes-McGuire (1994) and the related extensions.
Problem Sets (for Liran Einav's half)
Other Handouts (for Liran Einav's half)