Advanced Industrial Economics

by Martin, Stephen

• ISBN13: 9780631217572
• ISBN10: 0631217576
• Edition: 2nd
• Format: Paperback
• Copyright: 2001-10-08
• Publisher: Wiley-Blackwell

Summary

This updated and substantially revised second edition, like its predecessor, integrates a discussion of the latest theoretical developments with a comprehensive review of empirical work. Designed for upper-level undergraduates and graduates in industrial economics, there are complete treatments of the basic oligopoly models that are the bread and butter of theoretical industrial economics (Cournot, Bertrand, and extensions; horizontal and vertical product differentiation), of models of strategic behavior as well as of the determination of market and firm structure, and of the literatures on collusion, advertising, and the economics of innovation. Stephen Martin also provides a complete review of empirical tests of market performance, from Bain to the 'empirical renaissance' and beyond. contains expanded treatments of: bull; bull;hotelling's spatial model bull;oligopoly with quality differentiation bull;empirical evidence on entry and exit bull;the analysis of firm structure presents new discussions of: bull; bull;the classical view of the Cournot model bull;strategic substitutability and complementarity bull;representative consumer models of product differentiation bull;the Kreps and Scheinkman model with product differentiation bull;the New Empirical Industrial Organization, Solow residual, and event study approaches to the analysis of market power bull;deterministic and stochastic models of research and development With a more cohesive writing style, reduced size, additional invaluable information, and new problems to solve, the second edition of Advanced Industrial Economics is a key text in industrial economics. For more details and supplementary materials please visit http://www.blackwellpublishers.co.uk/martin/ The paperback edition of this book is not available from Blackwell in the US or Canda

Author Biography

Stephen Martin is Professor of Industrial Organization at the Faculty of Economics and Econometrics, University of Amsterdam. Since August 1996 he has been co-managing editor of the International Journal of Industrial Organization.

Table of Contents

Preface

Introduction

The Scope of the Field

Theory Versus Empiricism

Barriers to Entry and the Structurendash;Conductndash;Performance

A Decade of High Theory

An Outline of the Book

Foundations of Oligopoly

Introduction

Cournot in his Own Words

The Classical Oligopoly Theory Formulation

Best-Response Functions

Existence

Stability

Comparative Statistics: The Number of Firms

Limiting Behavior

Conclusion

Foundations of Oligopoly

Introduction

Cournot Duopoly as a Static Game

Static versus Dynamic? (Nash versus Cournot?)

Conjectural Variations

The Coefficient of Cooperation

Representative Consumer Models of Product Differentiation

Cournot with Product Differentiation

Bertrand with Product Differentiation

Prices versus Quantities

Supply Function Oligopoly

Two-stage Capacity-constrained Competition

Conclusion

Problems

Foundations of Oligopoloy

Hotelling

Beyond Hotelling

Vertical Product Differentiation

The Relation between Models of Horizontal and Vertical

Differentiation

Conclusion

Problems

Early Empirical Studies of Structurendash;Conductndash;Performance

Relationships

Introduction

Bain and the Critics

Early Econometric Work

Summary

Debates over Interpretation and Specification

Introduction

Market Power versus Efficiency

Measurement Issues in the Diagnosis of Market Power

Identification

Firm Effects versus Industry Effects

Conclusion

Problems

Empirical Studies of Market

Performance

Introduction

Conjectures

Time Series

Avoiding Cost Data I: NEIO

Avoiding Cost Data II: The Solow Residual

Validity Checks

Event Studies

Price Versus Rate of Return

The Persistence of Profits

Not the Last Word

Strategic Behavior: Investment in Entry Deterrence

Introduction

Excess Capacity

Switching Costs

Raising Rivals' Costs.Predatory Pricing

Limit Pricing

Advertising and Limit Pricing

Animal Farm

Conclusion

Problems

Advertising

The Dorfmanndash;Steiner Condition and Generalizations

Advertising as a Signal of Quality

Welfare Consequences of Advertising

The Duration of Advertising Effects

The Advertising Response to Entry

Conclusion

Problems

Collusion and Noncooperative Collusion

Introduction

Noncooperative Collusion in a Static Model

Noncooperative Collusion in Repeated Games

Price Wars

Conscious Parallelism

Facilitating Practices

Empirical Studies of Collusion

Conclusion

Problems

Market Structure, Entry, and Exit

Introduction

The Measurement of Seller Concentration

Entry Conditions and Market Structure

Product Differentiation as a Barrier to Entry

Financial Markets

Empirical Studies of Market Structure

Entry

Exit

Empirical Studies of Entry and Exit

Conclusion

Problems

Firm Structure, Mergers, and Joint Ventures

Introduction

Why are There Firms?

Corporate Governance.Business Groups

X-inefficiency

Horizontal Mergers

Vertical Mergers and Vertical Foreclosure

Diversification and Conglomerate Mergers

The Market for Corporate Control

Joint Ventures and Equity Interests

Conclusion

Problems

Vertical Restraints

Introduction

Incentives to Impose Vertical Restraints

Empirical Evidence

Conclusion

Research and Development

Introduction

Stylized Facts

Deterministic Innovation

Stochastic Innovation

Absorptive Capacity

Patents

Empirical Studies of R & D

Final Remarks

Problems

References

Index of Names

Index of Subjects

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