Common Sense and Simplicity in Empirical Industrial Organization

Ariel Pakes

No 10154, NBER Working Papers from National Bureau of Economic Research, Inc

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 effectively. 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.

JEL-codes: C1 L0 (search for similar items in EconPapers)
Date: 2003-12
New Economics Papers: this item is included in nep-com, nep-ent and nep-his
Note: IO
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Citations: View citations in EconPapers (8)

Published as Pakes, Ariel. "Common Sense And Simplicity In Empirical Industrial Organization," Review of Industrial Organization, 2003, v23(3-4,Dec), 193-215.

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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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