A Helicopter Tour of Some Underlying Issues in Empirical Industrial Organization

Ariel Pakes

Annual Review of Economics, 2021, vol. 13, issue 1, 397-421

Abstract: This review considers conceptual issues underlying empirical work on markets. It is divided in three parts. The first part reviews the analysis of demand and equilibrium in retail markets and then considers recent advances in the analysis of markets that require different assumptions: markets where adverse selection and moral hazard may be important, vertical markets with bargaining, and markets wherein a centralized allocation mechanism replaces prices. The second part considers the analysis of cost and production. It reviews the simultaneity and selection issues in production function estimation and then considers the distinction between revenue- and quantity-generating functions and its implications for the analysis of markups, as well as the empirical analysis of fixed costs and its implications for the analysis of product repositioning. The review concludes by considering issues that arise due to the complexity of the empirical analysis of market dynamics and appropriate ways of dealing with them.

Keywords: empirical analysis; markets; progress; current issues (search for similar items in EconPapers)
JEL-codes: D4 L1 L4 L5 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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Working Paper: A Helicopter Tour of Some Underlying Issues In Empirical Industrial Organization (2020)
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DOI: 10.1146/annurev-economics-082019-023513

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