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FIN 7310, Empirical Industrial Organization, Fall 2007; Wednesday, 1-3, SM 2.901
Course Description: This is a doctoral level course that covers the empirical side of
industrial organization. We will largely ignore the theoretical side of industrial
organization (has come to dominate much of microeconomics and many other fields in
the last few decades because it includes the strategic interaction of firms). Here we are
focused on more pedestrian but also more-real world set of topics (mainly empirical but
sometimes just very applied theory). Expertise in empirical topics tends to lead to greater
financial reward even if not to greater academic success than is the case for theoretical
models. Of course, we can only cover a smattering of topics since there are many
possible areas where empirical work has occurred.
Required Textbooks Carlton and Perloff’s “Modern Industrial Organization” 4th edition
(Addison-Wesley)
There are two types of articles on the reading list, some more important than others. The
articles marked with an asterisk are the more important ones. This reading list is likely to
change during the course.
I. Basic Material
Carlton and Perloff (CP) Chapters 1-4
*Material in your old micro text
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II. Problems in Finding Empirical Truth
*John J. Donohue “Can You Believe Econometric Evaluations of Law, Policy,
and Medicine?”
http://www.law.stanford.edu/display/images/dynamic/events_media/200
7_Donohue_John.pdf
John R. Lott, Jr., Florenz Plassmann, and John Whitley, 2002 “Confirming More
Guns, Less Crime” http://ssrn.com/abstract=372361
*Munnell, A., Tootell, G., Browne, L., Mceneaney, J., "Mortgage Lending In
Boston: Interpreting HMDA Data", American Economic Review, March
1996, Pp. 25-54.
*Oberholzer-Gee, F., K. Strumpf.. The Effect of File Sharing on Record Sales: An
Empirical Analysis. Journal of Political Economy February 2007 115(1)
1-42.
*[Does this paper measure a form of network effect?] “Experimental Study of
Inequality and Unpredictability in an Artificial Cultural Market” Science,
February 10, 2006: here, here and here.
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*Harberger, A. 1954 “Monopoly and Resource Allocation” American Economic
Review 44: 77-79,
*Posner, R. 1975 “The Social Costs of Monopoly and Regulation” Journal of
Political Economy 83(4): 807-27.
D. Anticompetitive behavior
*CP Chapter 19
???
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C. Network Effects and Lock-In, Winner-Take-All, First-Mover-
Wins.
*CP Appendix 11A
*Katz Michael L., and Carl Shapiro, "Network Externalities, Competition, and
Compatibility", American Economic Review, June 1985, 75:3, 424-440.
Farrell Joseph. and Garth Saloner, "Installed Base and Compatibility: Innovation,
Product Preannouncements, and Predation", American Economic
Review, December 1986, 76:5, 940-955.
*Liebowitz, S. J. and Stephen E. Margolis "Network Externality: An Uncommon
Tragedy" (with), The Journal of Economic Perspectives, Spring 1994,
pp. 133-150.
*David, Paul. A. 1985. "Clio and the Economics of QWERTY", 75 American
Economic Review, 332-7 (May). Click here
*Liebowitz, S. J. and Margolis, S. E. "The Fable of the Keys," JLE, April 1990,
pp. 1-26. Click Here.
W. Brian Arthur, “Positive Feedbacks in the Economy,” Scientific American, Feb.
1990 at: http://www.santafe.edu/arthur/Papers/Papers.html along with
other Arthur papers.
“Economists Decide to Challenge Facts of the QWERTY Story” Lee Gomes,
Wall Street Journal, February 25, 1998 Click here
*The Rise and Fall of Beta by Marc Wielage with Rod Woodcock
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B. The Economic Impact of Copying
*Hal R. Varian “Copying and Copyright” Journal of Economic Perspectives,
2004 click here
*Liebowitz, S. J., "Copying and Indirect Appropriability: Photocopying of
Journals," Journal of Political Economy, October 1985, 945-957. click
here
*Rob, R., J. Waldfogel. 2006. Piracy on the High C’s: Music Downloading, Sales
Displacement, and Social Welfare in a Sample of College Students.
Journal of Law and Economics 49(1) 29-62. click here
Stan Liebowitz “Will MP3 downloads Annihilate the Record Industry? The
Evidence so Far” Advances in the Study of Entrepreneurship, Innovation,
and Economic Growth, V. 15, 2004, pp. 229-260. Click here
Zentner, A. 2006 Measuring the Effect of Music Downloads on Music Purchases.
Journal of Law and Economics 49(1) 63-90.
Stan J Liebowitz “Testing File-Sharing’s Impact on Music Album Sales in Cities”
mimeo.
C. Assorted Topics
Julie Holland Mortimer “Price Discrimination, Copyright Law, and Technological
Innovation: Evidence from the Introduction of DVDs”, mimeo
Steve Berry and Joel Waldfogel: "Free Entry and Social Inefficiency in Radio
Broadcasting", Rand Journal of Economics 30 (Autumn 1999), 397-420.
D. Misc
Dennis Epple, " Hedonic Prices and Implicit Markets: Estimating Demand and
Supply Functions for Differentiated Products, " Journal of Political
Economy, 95(1), 1987, 59-80.]
Steve Berry, "Estimating Discrete Choice Models of Product Differentiation"
RAND Journal of Economics 25 (Summer 1994) 242-262.
Julie Mortimer, "The Effects of Revenue-Sharing Contracts on Welfare in
Vertically Separated Markets: Evidence from Video Rental Industry",
mimeo, January 2001.
Deaton, A. and Muellbauer, J. “An Almost Ideal Demand System.” American
Economic Review, 1975, 70, pp. 367-83.
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