14.271

Industrial Organization I

The course provides a graduate level introduction to Industrial Organization (IO). It is designed to provide a broad introduction to topics and industries that current researchers are studying as well as to expose students to a wide variety of techniques. It will start the process of preparing economics Ph.D. students to conduct thesis research in the area, and may also be on interest to doctoral students in other fields. The course integrates theoretical models and empirical studies. This year the emphasis, both in choice of topics and within topics, is on empirical methods. In this sense the course is not a perfect substitute for 14.271 offered last year and the one likely to be offered next year.

Lectures:                           Tuesday and Thursday, 10:30-12:00 a.m., E51-361

Instructor:                        Aviv Nevo, E52-452, (617) 253-3218, anevo@mit.edu

                                           http://emlab.berkeley.edu/~nevo

Teaching Assistant:         Andrew Sweeting, atsweet@mit.edu

                                           Recitation: Friday 10:30-12:00 

Course Web Page:           http://www.mit.edu/14.271/www

The course presumes that students have a familiarity with micro theory, basic game theory and econometrics.

The course will be graded on the basis of problem sets, a midterm and a final exam.

The primary text for the theoretical part of the course is Jean Tirole, The Theory of Industrial Organization, (Cambridge, MA: The MIT Press, 1988.) The text provides an overview of most of the theoretical topics. The text will be supplemented with a large number of recent journal articles, listed below. The following books are recommended as references and background reading.

Scherer, F. M., and David Ross, Industrial Market Structure and Economic Performance, Third edition, Boston: Houghton Mifflin Company, 1990.

Carlton, D. W. and J.M. Perloff, Modern Industrial Organization, Third edition, Harper Collins Collage Division , 1999.

Schmalensee, Richard, and Robert D. Willig, Handbook of Industrial Organization, Amsterdam: North-Holland, 1989.

The reading list given below is intended for your future reference as well as the course and includes more than we will cover in the course. The most important (i.e., required) readings are marked with a (*).

1. Introduction and Background

              (*) Tirole, Introduction.

              Schmalensee, Richard. 1989. “Inter-Industry Studies of Structure and Performance,” in Schmalensee and Willig (eds.), Handbook of Industrial Organization, Volume II, Chapter 16. Amsterdam: North-Holland.

               Salinger, M. 1990. “The Concentration-Margin Relationship Reconsidered ,”Brookings Papers on Economic Activity Micro: 287-335.

              Bresnahan, Timothy. 1989. “Empirical Studies of Industries with Market Power,” in Schmalensee and Willig (eds.), Handbook of Industrial Organization, Volume II: 1011-1058. Amsterdam: North-Holland.

2. Monopoly Pricing and Durable Goods

(*) Tirole, Chapter 1 (including supplementary section).

              Gul, F., H. Sonnenschein, and R. Wilson. 1986. “Foundations of Dynamic Monopoly and the Coase Conjecture,” Journal of Economic Theory, 39, 155-190.

              Joel Sobel. 1991. “Durable Goods Monopoly with Entry of New Consumers,” Econometrica, 59, 1455-85.

              Steve Salop. and Joe Stiglitz. 1982. “The Theory of Sales: A Simple Model of Equilibrium Price Dispersion with Identical Consumers,” American Economic Review; 72(5),1121-30.

              Martin Pesendorfer. 2002. “Retail Sales. A Study of Pricing Behavior in Supermarkets,” Journal of Business, 75, 33-66.

              Igal Hendel and Aviv Nevo. 2003. “Sales and Consumer Stockpiling,” NBER Working Paper No. 9048

3. Price Discrimination

              (*) Tirole, Sections 3.0-3.5

              R. Deneckere and R.P. McAfee. 1996. “Damaged Goods” , Journal of Economics and Management Strategy, 5, 149-174.

              E. Maskin and J. Riley. 1984. “Monopoly with Incomplete Information,” Rand Journal of Economics, 15, 171-96.

              R.P. McAfee, J. McMillan, and M. Whinston. 1989 “Multiproduct Monopoly, Commodity Bundling, and Correlation of Values,” Quarterly Journal of Economics, 104, 371-83.

              D. Fudenberg and J. Tirole.1998., “Upgrades, Trade-ins, and Buybacks,” Rand Journal of Economics, 29, 235-258

              Blackstone, Erwin. 1975. “Restrictive Practices in the Marketing of Electrofax Copying Machines: The SCM Corporation Case,” Journal of Industrial Economics 23(3), 89–202.

              (*) Shepard, Andrea. 1991. “Price Discrimination and Retail Configuration,” Journal of Political Economy 99 (February): 30-53.

              (*) Nevo, Aviv and Catherine Wolfram. 2000. “Prices and Coupons for Breakfast Cereals,”RAND Journal of Economics, 33(2), 319-339, 2002.

              Cohen, Andrew. 2000. “Package Size and Price Discrimination in the Paper Towel Market,” University of Virginia mimeo.

              McManus, Brian. 2001. “Nonlinear Pricing in an Oligopoly Market: the Case of Specialty Coffee.” Washington University Olin School of Business. Mimeo.

4. Price/Quantity Competition

A. Static Models

              (*) Tirole, Chapter 5 and Section 6.2.

              (*) F. Fisher, “Games Economists Play: A Noncooperative View,” Rand Journal of Economics, 20 (1989), pp. 113-124

              (*) Bresnahan, Timothy. 1982. “The Oligopoly Solution is Identified,”Economic Letters 10, 87-92.

              Ashenfelter, Orley and Dan Sullivan. 1987., “Nonparametric Tests of Market Structure: An Application to the Cigarette Industry,” Journal of Industrial Economics, 483-98.

              Panzar, John and James Rosse. 1987. “Testing for 'Monopoly' Equilibrium,”Journal of Industrial Economics, 443-56.

              Genesove, David and W. Mullin. 1998. “Testing Static Oligopoly Models: Conduct and Cost in the Sugar Industry, 1890-1914,” Rand Journal of Economics 29(Summer): 355-77.

              Wolfram, Catherine. 1999. “Measuring Duopoly Power in the British Electricity Spot Market,” American Economic Review 89 (September): 805-26

              Corts, Ken. 1998. “Conduct Parameters and the Measurement of Market Power,” Journal of Econometrics 88 (2): 227-250.

              Borenstein, Severin, Jim Bushnell and Frank Wolak. 2002. “Measuring Market Inefficiencies in California's Restructured Wholesale Electricity Market.”' American Economic Review, 92 (December).

B. Repeated Interaction

              (*) Tirole, Chapter 6.

              J. Rotemberg and G. Saloner, “A Supergame-Theoretic Model of Price Wars During Booms,” American Economic Review, 76 (June 1986), 390-407.

              E. Green and R. Porter, “Non-cooperative Collusion Under Imperfect Price Information,” Econometrica, 52 (January 1984), pp. 87-100.

              (*) E. Maskin and J. Tirole, “A Theory of Dynamic Oligopoly II: Price Competition, Kinked Demand Curves, and Edgeworth Cycles,” Econometrica, 56 (May 1988), pp. 571-599.

              G. Stigler, “A Theory of Oligopoly,” Journal of Political Economy, 72 (February 1964), pp. 44-61.

              (*) C. Fershtman and A. Pakes, “A Dynamic Oligopoly with Collusion and Price Wars,” Rand Journal of Economics, 31 (Summer 2000), pp. 207-236.

              (*) Porter, Robert. 1983. “A Study of Cartel Stability: The Joint Executive Committee, 1880-1886,” Bell Journal of Economics 14(Autumn): 301-314.

              (*) Ellison, Glenn. 1994. “Theories of Cartel Stability and the Joint Executive Committee,” Rand Journal of Economics 25(Spring): 37-57.

              (*) Borenstein, Severin and Andrea Shepard. 1996. “Dynamic Pricing in Retail Gasoline Markets,” Rand Journal of Economics 27(Autumn): 429-51.

              Aguirregabiria, Victor. 1999. “The Dynamics of Markups and Inventories in Retail Firms,” Review of Economic Studies, 275-308.

C. Competition and Price Dispersion: Price Discrimination, “Loss-leaders” and Search

              Severin Borenstein. 1985., “Price Discrimination in Free-Entry Markets.” RAND Journal of Economics, 16, 380-397.

              Holmes, T.J. 1989. “The Effects of Third-Degree Price Discrimination in Oligopoly.” American Economic Review, 79, 244-50.

              Ken Corts. 1998. “Third-Degree Price Discrimination in Oligopoly: All-Out Competition and Strategic Commitment.” RAND Journal of Economics, 29, 306-323.

              Borenstein, Severin and Nancy Rose. 1994. “Competition and Price Dispersion in the U.S. Airline Industry,” Journal of Political Economy 102 (August): 653-83.

              Meghan Busse and Marc Rysman. 2002. “Competition and Price Discrimination in Yellow Pages Advertising,” UC Berkeley mimeo.

              Miravete, Eugino and Lars-Hendrik Roller. 2003. “Competitive Nonlinear Pricing in Duopoly Equilibrium: The Early Cellular Telephone Industry.” University of Pennsylvania. Mimeo.

              Rajiv Lal and Carmen Matutes. 1994. “Retail Pricing and Advertising Strategies.” Journal of Business, 67, 345-370.

              Glenn Ellison. 2003. “A Model of Add-On Pricing.” NBER WP No. 9721.

              James MacDonald. 2000. “Demand, Information, and Competition: Why Do Food Prices Fall at Seasonal Demand Peaks?” Journal of Industrial Economics, 48(1), 27-45.

              Chevalier, Judy, Anil Kashyap and Peter Rossi. 2003. “Why Don’t Prices Rise During Periods of Peak Demand? Evidence from Scanner Data,” American Economic Review, 93(1), 15-37.

              Peter Diamond. 1971. “A Model of Price Adjustment,” Journal of Economic Theory, 3, 156-168.

              Hal Varian. 1980. “A Model of Sales,” American Economic Review, 70, 651-658.

              Dale Stahl. 996. “Oligopolistic Pricing with Heterogeneous Consumer Search,” International Journal of Industrial Organization, 14, 243-268.

              Preston McAfee. 1995. “Multiproduct Equilibrium Price Dispersion,” Journal of Economic Theory, 67(1), 83-105.

              Alan Sorensen. 2000., “Equilibrium Price Dispersion in Retail Markets for Prescription Drugs,” Journal of Political Economy, 108 (August), 833-850.

               Glenn Ellison and Sara Ellison, “Search, Obfuscation, and Price Elasticities on the Internet,” MIT mimeo.

5. Short-Run Price/Quantity Competition in Differentiated-Products Industries

              (*) Tirole, Section 2.1

              Anderson, S. P., A. dePalma and J. F. Thisse. 1992. Discrete Choice Theory of Product Differentiation, Cambridge and London, MIT Press.

              (*) Bresnahan, Timothy . 1987. "Competition and Collusion in the American Automobile Market: The 1955 Price War," Journal of Industrial Economics 45(June): 457-482.

              Gasami, F., J.J. Laffont, and Q. Vuong. 1992. “Econometric Analysis of Collusive Behavior in a Soft-Drink Market ,” Journal of Economics and Management Strategy 1(2): 277-311.

              Baker, Jon and Tim Bresnahan. 1988. “Estimating the Residual Demand Curve Facing a Single Firm,” International Journal of Industrial Organization, 283-300.

              Hausman, Jerry, G. Leonard, and J. Zona. 1994. “Competitive Analysis with Differentiated Products,” Annales D'Economie et de Statistique 34 (April/June): 159-80.

              McFadden, Dan. 1984. “Econometric Analysis of Qualitative Response Models,” in Griliches and Intilligator (eds.), Handbook of Econometrics, Volume III. Amsterdam: North-Holland.

              (*) Berry, Steve. 1994. "Estimating Discrete-Choice Models of Product Differentiation," Rand Journal of Economics 25(Summer): 242-262.

              (*) Nevo, Aviv. 2000. “A Practitioner’s Guide to Estimation of Random Coefficients Logit Models of Demand,” Journal of Economics & Management Strategy, 9(4), 513-548.

              (*) Berry, Steve, Levinsohn, James, and Ariel Pakes. 1995. "Automobile Prices in Market Equilibrium," Econometrica 63(July): 841-990.

              (*) Nevo, Aviv. 2001. “Measuring Market Power in the Ready-to-Eat Cereal Industry,” Econometrica, 69(2), 307-342,.

              (*) Goldberg, Pinelopi Koujianou. 1995. "Product Differentiation and Oligopoly in International Markets: The Case of the U.S. Automobile Industry," Econometrica 63(July): 891-951.

              Hendel, Igal. 1999. “Estimating Multiple Discrete Choice Models: An Application to Computerization Returns,” Review of Economic Studies, 66(2), 423-446.

              Berry, Steve Jim Levinsohn and Ariel Pakes. 1998. “Differentiated Products Demand Systems from a Combination of Micro and Macro Data: The new Car Market,” NBER WP no. 6481.

              Berry, Steve and Ariel Pakes. 2001 “Estimating the Pure Hedonic Discrete Choice Model with Application to Price Indices,” mimeo, Yale.

6. Welfare and Hedonic Prices

A. Hedonic Price Regressions and Price Indices

              Griliches, Zvi. 1961. “Hedonic Price Indexes for Automobiles: An Econometric Analysis of Quality Change.” In The Price Statistics of the Federal Government (General Series No. 73). New York: National Bureau of Economic Research; pp. 173-176. Reprinted in Griliches (ed.), Price Indices and Quality Change: Studies in New Methods of Measurement. Cambridge, Mass.: Harvard University Press, 1971.

              Feenstra, Robert. 1995. “Exact Hedonic Price Indexes,” Review of Economics and Statistics 77(4 ): 634-53.

              Pakes, Ariel. 2003. “A Reconsideration of Hedonic Price Indices with an Application to PC's,” Harvard, mimeo

              (*) Rosen, Sherwin M. 1974. “Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition,” Journal of Political Economy 82(Jan./Feb.): 34-55.

              Epple, Dennis. 1987. “Hedonic Prices and Implicit Markets: Estimating Demand and Supply Functions for

Differentiated Products,” Journal of Political Economy 95(January): 59-80.

              (*) Bajari, Patrick and Lanier Benkard. 2002. “Demand Estimation With Heterogeneous Consumers and Unobserved Product Characteristics: A Hedonic Approach.” Stanford University. Mimeo.

B. Welfare Measure Computed from Estimated Demand Systems

              (*) Trajtenberg, Manuel. 1989. “The Welfare Analysis of Product Innovations, with an Application to Computed Tomography Scanners.” Journal of Political Economy 97: 444-79.

              Bresnahan, Tim Scott Stern and Manuel Trajtanberg. 1997. “Market Segmentation and the Sources of Rents from Innovation,” Rand Journal of Economics, S17-S44.

              Petrin, Amil. 2002. “Quantifying the Benefits of New Products: The Case of the Minivan,”Journal of Political Economy 110: 705-729.

              (*) Hausman, Jerry A. 1996. “Valuation of New Goods Under Perfect and Imperfect Competition,” in Bresnahan and Gordon (eds) The Economics of New Goods, Studies in Income and Wealth, Vol. 58, Chicago: NBER. Including comment by Bresnahan (in the same volume) and reply to comment (and reply to reply).

               Hausman, Jerry A. 1999. “Cellular Telephone, New Products and the CPI,” Journal of Business and Economic Statistics 17(2): 188-94.

              Nevo, Aviv. 2003. “New Products, Quality Changes and Welfare Measures Computed from Estimated Demand Systems,” The Review of Economics and Statistics, 85(2), 266-275.

              Ackerberg, Dan and Marc Rysman. 2002. “Unobservable Product Differentiation in Discrete Choice Models: Estimating Price Elasticities and Welfare Effects.” UCLA/BU. Mimeo

7. Production, Technology and Industry Structure

              (*) Griliches, Zvi and Jacques Mairesse. 1995. “Production Functions: The Search for Identification ,” NBER Working Paper No.w5067.

              (*) Olley, Steve and Ariel Pakes. 1996. “The Dynamics of Productivity in the Telecommunications Industry," Econometrica, 64(6), 1263-97.

              Levinsohn, Jim and Amil Petrin. 2000. “Estimating Production Functions Using Inputs to Control for Unobservables,” NBER Working Paper No.w7819.

              Evans, David and James Heckman. 1984. “A Test for Subadditivity of the Cost Function with an Application to the Bell System,” American Economic Review, 74(4), 615-23, plus Comment and Errata, American Economic Review, 76(4), 854-8.

              Roller, L.. 1990. “Modeling Cost Structure: the Bell System Revisited,” Applied Economics, 22, 1661-1674.

              Wolak, Frank. 1994. “An Econometric Analysis of the Asymmetric Information Regulator-Utility Interaction," Annales D’Economie et de Statistique, 34, 12-69.

              Benkard, Lanier. 2000. “Learning and Forgetting: The Dynamics of Aircraft Production,” American Economic Review, 90(4), 1034-54.

8. Entry and Industry Structure

              (*) Tirole, Sections 7.1-7.2.

              J. Sutton. 1991. Sunk Costs and Market Structure. MIT Press, Chapters 1-2.

              Jovanovic,B. 1982. “Selection and the Evolution of Industry,” Econometrica, 649–70.

              (*) Bresnahan, Tim and Peter Reiss. 1990. “Entry in Monopoly Markets,”Review of Economics Studies, 531-53.

              Bresnahan, Tim and Peter Reiss. 1991. “Entry and Competition in Concentrated Markets,” Journal of Political Economy 99 (October): 977-1009.

              Bresnahan, Tim, and Peter Reiss. 1991. “Empirical Models of Discrete Games,” Journal of Econometrics 48: 57-81.

              (*) Berry, Steve. 1992. "Estimation of a Model of Entry in the Airline Industry", Econometrica 60(4): 889-918.

              Whinston, Michael and S. Collins. 1993. “Entry and Competitive Structure in Deregulated Airline Markets: An Event Study Analysis of People Express,” Rand Journal of Economics 23 (Winter): 445-62.

              Scott Morton, Fiona. 1999. “Entry Decisions in the Generic Pharmaceutical Industry.” Rand Journal of Economics 30(3); 421-40.

               Berry, Steve and Joel Waldfogel. 1999. “Free Entry and Social Inefficiency in Radio Broadcasting,” Rand Journal of Economics 30 (Autumn): 397-420.

              Mazzeo, Mike. 2002. “Product Choice and Oligopoly Market Structure,” Rand Journal of Economics 33(2): 221-242.

              (*) Seim, Katja. 2002. “An Empirical Model of Firm Entry with Endogenous Product-Type Choices.” Stanford GSB. Mimeo.

              (*) Einav, Liran. 2002. “Not All Rivals Look Alike: Estimating an Equilibrium Model of the Release Data Timing Game,” Stanford University. Mimeo.

              Elie Tamer. 2003. “Empirical Strategies for Estimating Discrete Games with Multiple Equilibria” Princeton mimeo.

              Toivannen, Otto and Mike Waterson. 2001. “Market Structure and Entry: Where’s the Beef?” University of Warwick Working Paper no. 593.

              Watson, Randell. 2003. “Product Variety and Competition in the Retail Market for Eyeglasses.” Mimeo.

9. Dynamic Models

A. Single Agent

              Judd, Ken.1998. Numerical Methods in Economics, MIT Press.

              Rust, John. 1996. “Structural Estimation of Markov Decision Processes,” Handbook of Econometrics, Volume 4, Chapter 51.

              Rust, John. 1996. “Numerical Dynamic Programming in Economics,” in H. Amman, D. Kendrick, and J. Rust (eds.), Handbook of Computational Economics, Volume 1, 619-729.

              Rust, John. 1997 “Using Randomization to Break the Curse of Dimensionality,” Econometrica 65(3), 487-516.

              Keane, Michael and Ken Wolpin. 1994. “The Solution and Estimation of Discrete Choice Dynamic Programming Models by Simulation and Interpolation: Monte Carlo Evidence,” Review of Economics and Statistics, 76(4), 648-72.

              Eckstein, Zvi and Kenneth Wolpin. 1989. “The Specification and Estimation of Dynamic Stochastic Discrete Choice Models,” Journal of Human Resources, 24, 562-98.

              Hotz, Joe and Bob Miller. 1993. “Conditional Choice Probabilities and the Estimation of Dynamic Models,” Review of Economic Studies 60, 497-529.

              Aguirregabiria, Victor and Pedro Mira. 2002.“Swapping the Nested Fixed Point Algorithm: A Class of Estimators for Discrete Markov Decision Models,” Econometrica, 70 (4), 1519-1543

              (*) Rust, John. 1987. “Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher,” Econometrica, 55(5), 999-1033.

              (*) Pakes, Ariel. 1986. “Patents as Options: Some Estimates of the Value of Holding European Patent Stocks,” Econometrica, 54(4), 755-784.

              Hitsch, Guenter. 2001. “Estimating a Bayesian Learning Model of Product Launch and Product Exit” University of Chicago GSB, mimeo.

              Erdem, Tulin and Michael Keane. 1996. “Decision-Making Under Uncertainty: Capturing Dynamic Brand Choice Processes in Turbulent Consumer Goods Markets,” Marketing Science, 15(1),1-20.

              Ackerberg, Dan. 1997. “Advertising, Learning, and Consumer Choice in Experience Good Markets: An Empirical Examination,”mimeo.

              (*) Hendel, Igal and Aviv Nevo. 2003. “Measuring the Implications of Sales and Consumer Stockpiling.” University of California, Berkeley. Mimeo.

B. Multi-Agent Models

              Dunne, T., Mark Roberts and Larry Samuelson. 1988. “Patterns of Entry and Exit in U.S. Manufacturing,” Rand Journal of Economics 19 (Winter): 495-515.

              Ericson ,Richard and Ariel Pakes. 1995. “Markov-Perfect Industry Dynamics: A Framework for Empirical Work,” Review of Economic Studies 62 (January): 53-82.

              (*) Pakes, Ariel and Paul McGuire. 1994. “Computing Markov-perfect Nash Equilibria: Numerical Implications of a Dynamic Differentiated Product Model,” Rand Journal of Economics 25 (Winter): 555-589.

              Pakes, Ariel and Paul McGuire. 2000. “Stochastic Algorithms, Symmetric Markov Perfect Equilibria and the 'Curse' of Dimensionality,” Econometrica 69(5): 1261-81.

              Pakes, Ariel. 2000. “A Framework for Applied Dynamic Analysis in I.O.,” NBER WP no. 8024.

              Benkard, Lanier. 2000. “Dynamic Equilibrium in the Commercial Aircraft Market,” NBER WP no. 7710.

10. Strategic Investment

              (*) Tirole, pp. 207-8, Chapter 8.

              (*) Richard Schmalensee. 1978. “Entry Deterrence in the Ready-to-Eat Breakfast Cereal Industry,” Bell Journal of Economics, 9, 305-327.

              Ken Judd. 1985. “Credible Spatial Preemption,” Rand Journal of Economics, 16, 153-166.

              (*) Glenn Ellison and Sara Ellison, “Strategic Entry Deterrence and the Behavior of Pharmaceutical Incumbents Prior to Patent Expiration,” MIT mimeo.

              Kadiyali, V. 1996. “Entry, its Deterrence, and its Accommodation: A Study of the U.S. Photographic Film Industry,” The Rand Journal of Economics, 27, 452-478.

              (*) M. Lieberman. 1987. “Post Entry Investment and Market Structure in the Chemical Processing Industry,” Rand Journal of Economics, 18, 533-549.

              R. Smiley. 1988. “Empirical Evidence on Strategic Entry Deterrence,” International Journal of Industrial Organization, 6, 167-180.

11. Adoption of Technology and Network Externalities

              (*) Tirole, Chapter 10.

               Glenn Ellison and Drew Fudenberg. 1993. “Rules of Thumb for Social Learning,” Journal of Political Economy, 101, 612-643.

              (*) Zvi Griliches. 1957. “Hybrid Corn: An Exploration in the Economics of Technological Change," Econometrica 25 (4), 510-522.

              (*) Saloner, Garth, and Andrea Shepard. 1995. “Adoption of Technologies with Network Effects: An Empirical Examination of the Adoption of Automated Teller Machines,” Rand Journal of Economics 26: 479-501.

              Joe Farrell and Garth Saloner. 1985. “Standardization, Compatibility, and Innovation,” Rand Journal of Economics, 16, 70-83.

              Mike Katz and Carl Shapiro. 1986. “Technology Adoption in the Presence of Network Externalities,” Journal of Political Economy, 94, 822-841.

              Postrel, Steven R. 1990. “Competing Networks and Proprietary Standards: The Case of Quadraphonic Sound,” Journal of Industrial Economics 39: 169-185.

              (*) Gandal, Neil, M. Kende and Rafi Rob. 2000. “The Dynamics of Technological Adoption in Hardware/Software Systems: The Case of Compact Disk Players,” Rand Journal of Economics, 31(1), 43-61.

              Goolsbee, Austin and Peter Klenow. 2002. “Evidence on Learning and Network Externalities in the Diffusion of Home Computers.” Journal of Law and Economics, XLV (2), 317-344

              Rysman, Marc. 1999. “Competition Between Networks: A Study of the Market for Yellow Pages,” Boston University, mimeo.

              (*) Pinar Karaca Mandic. 2003. “Network Effects in Technology Adoption: The Case of DVD Players,” UC Berkeley. Mimeo.

12. Auctions

              (*) Paul Klemperer. 1999. “Auction Theory: A Guide to the Literature,” Journal of Economic Surveys, 13, 227-286.

              P. McAfee and J. McMillan. 1987., “Auctions and Bidding,” Journal of Economic Literature, 699-738.

              Paul Milgrom. 1989. “Auctions and Bidding: A Primer,” Journal of Economic Perspectives, 3-22.

              Ashenfelter, Orley. 1989. “How Auctions Work for Wine and Art,” Journal of Economic Perspectives, 23-36.

              Athey, Susan and Philip Haile. 2002. “Identification of Standard Auction Models,” Econometrica 70 (6), 2107-40.

              Athey, Susan and Jon Levin. 2001. “Information and Competition in U.S. Forest Service Timber Auctions,” Journal of Political Economy, 375-417.

              Bajari, Pat and Lixin ye. 2001. “Competition Versus Collusion in Procurement Auctions: Identification and Testing," Stanford University, mimeo.

              Estelle Cantillon and Mrtin Pesendorfer. 2003. “Combination Bidding in Multi-unit Auctions.” Mimeo.

              Guerre, E., I. Perringe and Q. Voung. 2000. “Optimal Nonparametric Estimation of First-Price Auctions.” Econometrica 68(3), 525-74.

              Haile, Philip. 2001. “Auctions with Resale Markets: An Application to U.S. Forest Service Timber Sales,” American Economic Review 91(3), 399-427.

              Haile, Philip. Han Hong and Matt Shum. 2003. “Nonparametirc Tests for Common Values in First-Price Sealed-Bid Auctions.” Mimeo.

              (*) Haile, Philip and Elie Tamer. 2003. “Inference with an Incomplete Model of English Auctions,” Journal of Political Economy 111(1), 1-51.

              Hendricks, Ken and Harry Paarsch, 1995. “A Survey of Recent Empirical Work Concerning Auctions,” Canadian Journal of Economics, 315-38.

              Hendricks, Ken, Joris Pinkse and Rob Porter. 2000. “Empirical Implications of Equilibrium Bidding in First Price, Symmetric Common Value Auctions,” Review of Economic Studies, forthcoming.

              (*) Hendricks, Ken and Rob Porter. 1988. “An Empirical Study of an Auction with Asymmetric Information,” American Economic Review 78, 865-883.

              Hortaçsu, Ali. 2001. “Mechanism Choice and Strategic Bidding in Divisible Good Auctions: An Empirical Analysis of the Turkish Treasury Auction Market,” University of Chicago. Mimeo.

              Laffont, J.J. 1997. “Game Theory and Empirical Economics: The Case of Auction Data,” European Economic Review, 1-35.

              Laffont, J.J., H. Ossard and Q. Vuong. 1995. “Econometrics of First Price Auctions,”Econometrica, 953-80.

              (*) Paarsch, Harry. 1992. “Deciding Between the Common and Private Value Paradigms in Empirical Models of Auctions,” Journal of Econometrics, 191-215.

              Pesendorfer, Martin. 2000. “A Study of Collusion in First-Price Auctions,” Review of Economic Studies, 381-411.

              Pesendorfer, Martin and M. Jofre-Bonet. 2000. “Bidding Behavior in a Repeated Procurement Auction,” Yale, mimeo

              Porter, Rob. 1995. “The Role of Information in U.S. Offshore Oil and Gas Lease Auctions,” Econometrica, 1-27.

              Porter, Rob and Doug Zona, 1993. “Detection of Bid Rigging in Procurement Auctions,” Journal of Political Economy, 518-38.

13. Advertising

              Ackerberg, Dan. 2001. “Empirically Distinguishing Informative and Prestige Effects of Advertising,” Rand Journal of Economics 32(2), 316-333.

              Benham, L. 1972. “The Effects of Advertising on the Price of Eyeglasses,”Journal of Law and Economics, 337-52.

              Jin, Ginger and Phillip Leslie. 2000. “The Effects of Disclosure Regulation: Evidence from Restaurants.” Quarterly Journal of Economics, forthcoming.

              (*) Milyo, J. and Joel Waldfogel. 1999. “The Effect of Price Advertising on Prices: Evidence in the Wake of 44 Liquormart,” American Economic Review 89, 1081-96.

               Rizzo, J. and R. Zeckhauser. 1990. “Advertising and Entry: The Case of Physician Services,” Journal of Political Economy, 476-500.

              Sauer, R. and K. Leffler. 1990. “Did the Federal Trade Commission's Advertising Substantiation Program Promote More Credible Advertising?” American Economic Review, 191-203.

14. Information Imperfections and Product Markets

              Cardon, James and Igal Hendel. 2001. “Asymmetric Information in Health Care and Health Insurance Markets,” Rand Journal of Economics, Autumn.

              Chiappori, P. And B. Salanie. 2000. “Testing Contract Theory: A survey of Recent Work.” University of Chicago. Mimeo.

              Genesove, David. 1993. “Adverse Selection in the Wholesale Used Car Market,” Journal of Political Economy 101 (August): 644-665.

              Genesove, David. 1995. “Search at Wholesale Auto Auctions,” Quarterly Journal of Economics 110 (February): 23-49.

              Hendel, Igal and Alessandro Lizzeri. 1999. “Adverse Selection in Durable Goods Markets,” American Economic Review, 89(5).

              Hubbard, Tom. 1998. “An Empirical Examination of Moral Hazard in the Vehicle Inspection Market,” Rand Journal of Economics, 29(2), 406-26.

              Porter, Rob and Peter Sattler. 1999. “Patterns of Trade in the Market for Used Durables: Theory and Evidence,” NBER Working Paper #7149.

15. Contracts, etc.

              Bajari, Pat, Rob McMillan and Steve Tadelis. 2002. “Auctions versus Negotiations in Procurement; An Empirical Analysis.” Stanford. Mimeo.

              Baker, George and Tom Hubbard. 2002. “Make versus Buy in Trucking: Asset Ownership, Job Design and Information.” American Economic Review, forthcoming.

              Hendel, Igal and Alessandro Lizzeri. 2001. “The Role of Commitment in Dynamic Contracts: Evidence from Life Insurance,” Quarterly Journal of Economics, forthcoming.

              Joskow, Paul. 1987. "Contract Duration and Relationship-Specific Investments: Empirical Evidence from Coal Markets," American Economic Review 77(1): 168-85.

              Joskow, Paul. 1990. "The Performance of Long-Term Contracts: Further Evidence from Coal Markets," Rand Journal of Economics, 21(2): 251-274.

              Lafontaine, Francine. 1992. “Agency Theory and Franchising: Some Empirical Results,” Rand Journal of Economics 23(2): 263-283.

              Lafontaine, Francine and Margaret Slade. 1997. “Retail Contracting: Theory and Practice,” Journal of Industrial Economics, March: 1-25.

              Rose, Nancy and Andrea Shepard. 1997. “Firm Diversification and CEO Compensation” Managerial Ability of Executive Entrenchment?” Rand Journal of Economics 28(3): 489-514.

              Shepard, Andrea. 1993. "Contractual Form, Retail Price, and Asset Characteristics in Gasoline Retailing," Rand Journal of Economics 24(1): 58-77.

              Wolfram, Catherine. 1998. “Increases in Executive Pay Following Privatization,” Journal of and Management Strategy, 7(fall).

              Berto Villas-Boas, Sofia. 2001. “Vertical Contracts Between Manufacturers and Retailers: An Empirical Analysis,” University of California, Berkeley, mimeo.

              Hastings, Justine. 2001. “Vertical Relationships and Competition in Retail Gasoline Markets: Empirical Evidence from Contract Changes in Southern California,” Power Working paper no. 75, University of California Energy Institute.

              Manuszak, Mark. 2001. “The Impact of Upstream Mergers on Retail Gasoline Markets,” Carnegie Mellon University, mimeo.

              Mortimer, Julie. 2001. “The Effect of Revenue-Sharing Contracts on Welfare in Vertically-Separated Markets: Evidence from the Video Rental Industry,” Harvard University, mimeo.