Holger Sieg University of Pennsylvania Fall 2015 Empirical Industrial Organization: Economics 781 COURSE DESCRIPTION: The course provides an introduction to recent methods and applications in empirical industrial organization. Grades will be based on two take-home computational assignments and class participation and a presentation of an assigned paper. TOPICS: 1. Motivation: Reiss, P., and Wolak, F. (2006): Structural Econometric Modeling: Rationales and Examples from Industrial Organization, Handbook of Econometrics, volume 6. 2. Static Discrete Demand and Supply Models of Product Differentiation: Berry, S. (1994), Estimating Discrete-Choice Models of Product Differentiation, Rand Journal of Economics, 25(2), 242-262. Berry, S, Levinsohn, J. and A. Pakes (1995), Automobile Prices in Equilibrium, Econometrica, 63(4), 841-890. Berry, S., Linton, O. and A. Pakes (2004), Limit Theorems for Estimating the Parameters of Differentiated Product Demand Models, Review of Economic Studies, 71(3), 613-654. Berry, S., J. Levinsohn, and A. Pakes, (2004): Differentiated Product Demand Systems From a Combination of Micro and Macro Data: The New Car Market, Journal of Political Economy, 112(1), 68-104.
Imbens, G. and J. Woolridge (2007), Discrete Choice, NBER Lecture Notes 11. Available at http://www.nber.com/minicourse3.html Steven Berry and Philip Haile (2011) Identification in Differentiated Products Markets Using Market Level Data. Working Paper. 3. Productivity and Production Functions: Olley, G. Steven, and Ariel Pakes (1996). The Dynamics of Productivity in the Telecommunications Equipment Industry. Econometrica, 64(6): 1263-1297. Blundell, Richard, and Stephen Bond (1998). Initial Conditions and Moment Restrictions in Dynamic Panel Data Models. Journal of Econometrics, 87(1): 115-143. Levinsohn, James, and Amil Petrin (2003). Estimating Production Functions Using Inputs to Control for Unobservables. Review of Economic Studies, 70(2): 317-342. Ackerberg, Daniel, Kevin Caves, and Garth Frazer. (2006) Structural Identification of Production Functions. Working Paper. Foster, L., J. Haltiwanger, and C. Syverson (2008), Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?, American Economic Review, 2008. 98(1):,394-425. de Loecker, Jan (2011), Product Differentiation, Multi-Product Firms and Estimating the Impact of Trade Liberalization on Productivity, Econometrica. 4. Static Discrete Games: Entry and Exit Breshnahan, T. and P. Reiss (1991), Entry in Monopoly Markets, Review of Economic Studies, 57 (4) 57-81. Berry, S. (1992), Estimation of a Model of Entry in the Airline Industry, Econometrica, 60 (4), 889-917. Tamer, E. (2003): Incomplete Simultaneous Discrete Response Model with Multiple Equilibria, Review of Economic Studies, 70(1), 147-165.
Berry, Steven and Reiss, Peter (2006): Empirical Models of Entry and Market Structure Chapter for Volume III of the Handbook of Industrial Organization. Seim, K. (2006), An Empirical Model of Firm Entry with Endogenous Product- Type Choices, RAND Journal of Economics 37(3), 2006. Sweeting, A. (2009): The Strategic Timing of Radio Commercials: An Empirical Analysis Using Multiple Equilibria, RAND Journal of Economics, 40(4). Ciliberto, F. and E. Tamer (2009): Market Structure and Multiple Equilibria in Airline Markets, Econometrica, 77, 17911828. 5. Dynamic Discrete Choice Models Rust, J. (1994), Structural Estimation of Markov Decision Processes, in: Handbook of Econometrics IV, 3081-3143. Hotz, J. and R. Miller (1993), Conditional Choice Probabilities and the Estimation of Dynamic Models. Review of Economic Studies, 60, 397-429. Hotz, V. J., R. A. Miller, S. Sanders, and J. Smith (1994). A simulation estimator for dynamic models of discrete choice. The Review of Economic Studies 61 (2), 265-289. Aguirregabiria, V. and Mehra, P. (2002), Swapping the Nested Fixed Point Algorithm: A Class of Estimators for Discrete Markov Decision Models, Econometrica, 70, 1519-1543. Magnac, T. and D. Thesmar (2002), Identifying Dynamic Discrete Decision Processes, Econometrica, Vol. 70, No. 2 (March, 2002), 801-816. Hendel, I. and A. Nevo (2006): Measuring the Implications of Sales and Consumer Stockpiling Behavior, Econometrica, 74(6), 1637-1673. Holmes, T. (2010): Diffusion of Wal-Mart and Economies of Density, Econometrica, 79, 253-302. Gowrisnkaran, G and Rysman, M. (2012) Dynamics of Consumer Demand for New Durable Goods. Journal of Political Economy, 120, 1173-1219.
6. Dynamic Discrete Games: Models and Computation Pakes, Ariel and Paul McGuire (1994). Computing Markov-perfect Nash Equilibria: Numerical Implications of a Dynamic Differentiated Product Model, Rand Journal of Economics, 25, 555-589. Ericson, R. and A. Pakes (1995), Markov Perfect Industry Dynamics: a Framework for Empirical Work, Review of Economic Studies, 62, 53-82. Doraszelski, U. and M. Satterthwaite (2005): Foundations of Markov-Perfect Industry Dynamics: Existence, Purification, and Multiplicity, Working Paper. Doraszelski, Ulrich and Pakes, Ariel (2006): A Framework for Applied Dynamic Analysis in IO, in: Mark Armstrong and Robert Porter (eds.), Handbook of Industrial Organization, Volume 3, North-Holland, Amsterdam. Benkard, L., Weintraub, G. and B. Van Roy (2008), Markov Perfect Industry Dynamics with Many Firms, Econometrica, Nov, 1375-1411. 7. Dynamic Discrete Games: Estimation Ackerberg, D., L. Benkard, S. Berry, and A. Pakes (2006): Econometric Tools for Analyzing Market Outcomes, in: Handbook of Econometrics, volume 6. Victor Aguirregabiria and Pedro Mira, Sequential Estimation of Dynamic Discrete Games, Econometrica 75 (1) (2007), 1-54. Bajari, P., L. Benkard, and J. Levin (2007): Estimating Dynamic Models of Imperfect Competition, Econometrica, 1331-1370. Aguirregabiria, V. and P. Mira (2010): Dynamic Discrete Choice Structural Models: A Survey, Journal of Econometrics, forthcoming. 8. Dynamic Discrete Games: Applications Benkard, L. (2004): A Dynamic Analysis of the Market for Wide-Bodied Commercial Aircraft Market, Review of Economics Studies, 71, 581-611.
Goettler, R and Gordon, B. (2011), Does AMD spur Intel to innovate more? Journal of Political Economy, 119(6), 1141-1200. Ryan, S. (2012): The Costs of Environmental Regulation in a Concentrated Industry, Volume 80, Issue 3, May 2012, p. 1019-1062. Schmidt-Dengler, P. (2006): The Timing of New Technology Adoption: The Case of MRI, Working Paper. 9. Bargaining: Sieg (2000), Estimating a Bargaining Model with Asymmetric Information: Evidence from Medical Malpractice Disputes. Journal of Political Economy, 108 (5), 1006-1021. Crawford, G. and Yurukoglu (2012). The Welfare Effects of Bundling in Multichannel Television Markets, American Economic Review.