Common Sense and Simplicity in Empirical Industrial Organization

Ariel Pakes

No 2022, Harvard Institute of Economic Research Working Papers from Harvard - Institute of Economic Research

Abstract: This paper is a revised version of a keynote address delivered at the inaugural International Industrial Organization Conference in Boston, April 2003. I argue that new econometric tools have facilitated the estimation of models with realistic theoretical underpinnings, and because of this, have made empirical I. O. much more useful. The tools solve computational problems thereby allowing us to make the relationship between the economic model and the estimating equations transparent. This, in turn, enables us to utilize the available data more e ectively. It also facilitates robustness analysis and clarifies the assumptions needed to analyze the causes of past events and/or make predictions of the likely impacts of future policy or environmental changes. The paper provides examples illustrating the value of simulation for the estimation of demand systems and of semiparametrics for the estimation of entry models.

Date: 2003
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Journal Article: Common Sense and Simplicity in Empirical Industrial Organization (2003)
Journal Article: Common Sense and Simplicity in Empirical Industrial Organization (2003)
Working Paper: Common Sense and Simplicity in Empirical Industrial Organization (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:fth:harver:2022

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