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Foreword | p. xi |
Introduction and Overview | p. 1 |
Three Main Questions | p. 1 |
Structure-Conduct-Performance | p. 3 |
Static Models | p. 5 |
Dynamics | p. 7 |
Strategies | p. 11 |
Structure-Conduct-Performance | p. 13 |
Measures of Market Performance | p. 14 |
Rate of Return | p. 14 |
Price-Cost Margins | p. 18 |
Tobin's q | p. 19 |
Measures of Market Structure | p. 19 |
Firm Size Distribution | p. 20 |
Concentration Measures | p. 20 |
Concentration Statistics | p. 20 |
Problems with Using Concentration Measures | p. 22 |
Summary Statistic Biases | p. 23 |
Barriers to Entry | p. 24 |
Unionization | p. 25 |
The Relationship of Structure to Performance | p. 25 |
Rates of Return and Industry Structure | p. 25 |
Price-Cost Margins and Industry Structure | p. 27 |
Price-Average Cost Margins | p. 27 |
Price-Marginal Cost Margins | p. 28 |
Other Explanatory Variables | p. 30 |
International Studies of Performance and Structure | p. 30 |
Performance and Structure in Individual Industries | p. 31 |
Measurement and Statistical Problems | p. 31 |
Conceptual Problems | p. 32 |
A Modern Structure-Conduct-Performance Approach | p. 34 |
Theory | p. 34 |
Exogenous Sunk Cost | p. 35 |
Endogenous Sunk Costs | p. 37 |
Empirical Research | p. 39 |
Summary | p. 40 |
Problems | p. 40 |
Industry Models of Market Power | p. 42 |
Structural Approach | p. 43 |
Interpretations of &lamda; | p. 45 |
Identification | p. 47 |
Estimation and Hypothesis Tests | p. 50 |
Taxes: An Application | p. 51 |
Nonparametric and Reduced-Form Models | p. 53 |
Comparative Statics | p. 53 |
Hall's Reduced-Form Approach | p. 55 |
Oligopsony | p. 58 |
Structural Oligopsony Model | p. 58 |
Hall's Reduced-Form Oligopsony Model | p. 59 |
How Well These Methods Work | p. 59 |
Tests Based on Cost Evidence | p. 60 |
Oligopoly Simulations | p. 60 |
Structural Model | p. 62 |
Hall's Reduced-Form Model | p. 65 |
Empirical Comparisons | p. 69 |
Summary | p. 70 |
Problems | p. 72 |
Differentiated-Product Structural Models | p. 74 |
Residual Demand | p. 75 |
Neoclassical Demand System | p. 77 |
Multilevel Demand Specifications | p. 77 |
An Almost Ideal Demand System Example | p. 78 |
Estimation | p. 80 |
Identification | p. 80 |
Instruments | p. 81 |
Hypothesis Tests | p. 82 |
Random Parameter Model | p. 83 |
Linear Random Utility Model | p. 83 |
Estimating the Random-Parameter Model | p. 86 |
Market Power | p. 89 |
Summary | p. 91 |
Problems | p. 91 |
Strategic Reasons for a Dynamic Estimation Model | p. 93 |
Supergames | p. 94 |
Empirical Implications | p. 98 |
Models of Repeated Games with Trigger Strategies | p. 99 |
Models of Repeated Games with Continuous Strategies | p. 104 |
Summary | p. 108 |
Problems | p. 109 |
Dynamic Games Involving Economic Fundamentals | p. 113 |
Fundamental Reasons for Dynamics | p. 114 |
Production Fundamentals | p. 114 |
Demand Fundamentals | p. 116 |
A Dynamic Game with a Quasi-Fixed Input | p. 117 |
Open-Loop Rules | p. 121 |
Time Consistency of Open-Loop Rules | p. 122 |
Different Approaches to Obtaining Necessary Conditions | p. 123 |
Subgame Perfection and Markov Strategies | p. 125 |
Differentiable Markov Perfect Strategies | p. 127 |
A Sticky Price Model | p. 128 |
Multiplicity of Equilibria | p. 130 |
Selecting a Particular Equilibrium | p. 132 |
Comparing Open-Loop and Markov Equilibria | p. 132 |
Markov Perfect Equilibria and Conjectural Variations | p. 135 |
Empirical Implications | p. 136 |
Different Ways to Interpret Open-Loop Equilibrium | p. 140 |
Summary | p. 141 |
Problems | p. 142 |
Estimation of Dynamic Games Involving Economic Fundamentals | p. 147 |
Overview of Two Examples | p. 147 |
The Sticky Price Model | p. 149 |
The Dynamic Programming Equation | p. 151 |
The Euler Equation for a Special Case | p. 152 |
Other Approaches to Deriving the Euler Equation | p. 153 |
The Estimation Model | p. 154 |
The General Model | p. 155 |
An Additional Assumption about Demand | p. 156 |
Random Demand Shifters | p. 157 |
Estimation Using the Dynamic Programming Equation | p. 158 |
A Related Dynamic Oligopoly Model | p. 162 |
A Dynamic Model with Advertising | p. 163 |
The Open-Loop Equilibrium to the Advertising Model | p. 164 |
The Markov Perfect Equilibrium to the Advertising Model | p. 166 |
The Hybrid Model | p. 168 |
Estimation of Markov Perfect Equilibria | p. 170 |
Summary | p. 178 |
Problems | p. 179 |
Estimation of Market Power Using a Linear-Quadratic Model | p. 181 |
Assumptions and Definitions | p. 182 |
The Static Analog | p. 183 |
The Dynamic Model | p. 184 |
Implications of the Linear-Quadratic Structure | p. 185 |
The Recursive Structure of the Solution | p. 186 |
The Principle of Certainty Equivalence | p. 187 |
Properties of the Equilibria | p. 189 |
Equilibrium Conditions Used for Estimation | p. 192 |
Necessary Conditions for the Open-Loop Equilibrium | p. 193 |
Necessary Conditions for the Markov Perfect Equilibrium | p. 195 |
Additional Restrictions and Testing | p. 197 |
Empirical Applications | p. 198 |
Coffee | p. 198 |
Rice | p. 199 |
Estimation Results | p. 200 |
Classical Estimates | p. 200 |
Bayesian Estimates | p. 202 |
Simulations | p. 204 |
Summary | p. 205 |
Derivation of Restrictions | p. 206 |
The Open-Loop Restrictions | p. 206 |
The Markov Perfect Restrictions | p. 207 |
Problems | p. 208 |
Estimating Strategies: Theory | p. 211 |
Related Studies | p. 213 |
Mixed Strategies | p. 217 |
Oligopoly Game | p. 219 |
The Strategies and the Game | p. 219 |
Econometric Adjustments for the Game | p. 220 |
The Estimation Model | p. 221 |
Classical Maximum Entropy Formulation for the Multinomial Problem | p. 222 |
Incorporating the Sample Information | p. 223 |
Incorporating the Nonsample, Game-Theoretic Information | p. 227 |
Properties of the Estimators | p. 229 |
The GME-Nash Estimator: Hypothesis Testing | p. 229 |
Summary | p. 232 |
Proof that the GME-Nash Estimator Is Consistent | p. 233 |
Problems | p. 234 |
Estimating Strategies: Case Studies | p. 235 |
Airlines Game | p. 235 |
Airlines Model | p. 236 |
Estimates | p. 237 |
Comparing Estimators | p. 241 |
Hypothesis Tests | p. 243 |
Sampling and Sensitivity Experiments | p. 245 |
Airlines Summary | p. 246 |
Cola Game | p. 247 |
Cola Model | p. 247 |
Estimates | p. 249 |
Basic Statistics and Tests of the Cola Market | p. 252 |
Lerner Measures of Market Power | p. 257 |
Effects of the Exogenous Variables | p. 257 |
Cola Summary | p. 259 |
Summary | p. 259 |
Expected Lerner Measure | p. 260 |
Problems | p. 261 |
Statistical Appendix | p. 263 |
Bibliography | p. 289 |
Answers | p. 303 |
Index | p. 325 |
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