Questions tagged [industrial-organisation]

Industrial organization is a field that builds on the theory of the firm by examining the structure of (and, therefore, the boundaries between) firms and markets. Industrial organization adds real-world complications to the perfectly competitive model, complications such as transaction costs, limited information, and barriers to entry of new firms that may be associated with imperfect competition.

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1answer
90 views

Where can I look up a companies Herfindahl index?

Where can I find Herfindahl indexes on companies (current or past)? Are there any published lists put out by a research institution?
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188 views

Intuition behind a cournot duopoly nash equilibrium producing a higher output than a monopoly?

I am just wondering if someone could explain the descriptive, not mathematical intuition behind why a cournot equilibrium for a duopoly produces a higher level of output than a monopolist but lower ...
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83 views

Firm Dynamic Optimization Problem

A firm has received an order at time $0$ for $M$ units of product to be delivered by time $T$. It seeks a production schedule for filling this order at minimum cost. Let $x(t)$ denote inventory ...
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1answer
95 views

Competition and welfare - empirical evidence

Consider the following claims: less competitive markets deliver worse outcomes for consumers, less competitive markets deliver lower social welfare, less competitive markets deliver higher prices/...
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1answer
102 views

Help with Monopolistic Competition Proof, Prove Love for Variety

I need some help with a proof. Assume η = 2 and there are just two goods. Verify that the following utility function exhibits Love for Variety tastes, show that: u(λa + [1 − λ]b, λb + [1 − λ]...
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1answer
268 views

Math in Melitz and Ottaviano (2008)

I am reading Melitz and Ottaviano (2008), but I find it hard to understand some math in the model. The preference is given by : , which implies a demand function: Then the paper says the "inverse ...
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1answer
45 views

Capital mobility across industries and equalization of profit rates

What are some restrictions to the competitive restoration of proportionality across industries in regards to capital mobility? What is generally impeding the free flow of capital from less profitable ...
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1answer
32 views

Developmental studies and industrial policy for the highly developed countries - research trends?

Developmental studies usually is field of reasearch whose object is developing countries and industrial policy studies similarly are attributed to the developing countries or the things of the past. ...
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1answer
355 views

Collusion, deviation from equilibrium

Two firms can produce either low (L), medium (M) or high (H) quantity. The payoff matrix is given by: What is the outcome of this game if firms play only once? Suppose the game is played for infinite ...
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1answer
188 views

Clarification about demand elasticity and monopoly

I am having a difficulty understanding certain things about elasticity and would like to clarify them. What I understand. Elasticity is the percent change in quantity due to a percent change in price,...
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1answer
211 views

Understanding the elasticity of demand for a monopoly

Question: Your are working for a firm that is a monopoly. It is producing using technology that exhibits obvious decreasing returns to scale. After working with them for a while, a co-worker makes a ...
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1answer
41 views

:History: Industry threatening to leave if social change takes effect

With growing inequalities and salary gap, left-wing politicians are asking for social reforms in some countries (I am thinking of France). Social reform include: equal pay for women, maternity leave,...
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85 views

Price discrimination

If I have 3 consumers who I want to sell package 1, 2 and 3 to respectively. Meaning consumer 1 I would like to sell package 1 to, consumer 2 I would like to sell package 2 to and so on. The packages ...
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1answer
141 views

Cournot model with piecewise inverse demand

Do you know if there exist results for Cournot oligopoly (or duopoly) when the inverse demand is a piecewise continuous? Something of this type $P(Q) = \alpha-\beta Q$ (if $0\leq Q<Q'$) $P(Q) = ...
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2answers
130 views

Price setting firms with cost reduction technology

As part of my undergraduate studies in Industrial Economics, I am trying to solve the following question: Two price-setting firms are competing in a market for a homogeneous product. There are 10,...
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0answers
710 views

Cobb-Douglas production function with continuum of goods

I'm trying to derive the solution to a final producer with unit elasticity of substitution and a continuum of inputs (of measure $x$). She minimizes input costs, given an output of $q$. $$ \min_{\{y(...
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32 views

Is there a standard way of classifying industries into primary, secondary, and tertiary?

For example, does any government (or academic) have a mapping from industry to sector. For example, mining is primary industry, and retail is tertiary, and so on...
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1answer
74 views

Limit of this sequence // broadness of inputs

Let there be a unit measure of inputs. Define by $C_i = \left[\int_0^i c(i)^{1-\alpha}\right]^\frac{1}{1-\alpha}$ a cost index of using up to $i$ as input. I discretize $c(i)$ by $c_0, \dots c_i, \...
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1answer
56 views

Maximum level of profit attainable when discount factor is too low

This is a question I encountered during my undergraduate studies in Industrial Economics. So the question goes like this: Consider two identical firms with constant marginal cost $c$ which ...
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1answer
58 views

Directed search with privately informed buyers and capacities

My question seems to be a basic one and there should be a rather well-known reference in the (IO or labor) search literature. I will upvote (and comment on) any relevant answer and I will accept an ...
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1answer
45 views

Quality Provision Game

A seller owns a single unit of an invisible good. It is worth $v(s)$ to a buyer, where $s ∈ R^+$ is the quality of the good. The function $v(·)$ is strictly increasing and strictly concave with $v(0) =...
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1answer
231 views

Short-run price competition with capacity contraints

I am doing an undergrad course in Industrial Organization and at the end of the chapter on Short-run price competition (Bertrand and Cournot models mainly), there is a question with which I'm ...
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3answers
2k views

Long Run Equilibrium of Oligopolies

The long run equilibrium of a perfectly competitive market is well established. My question is - are the concepts of a long run equilibrium in a perfect competition extendable (analogous or otherwise) ...
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0answers
21 views

Microeconomics and management science of professional open source companies?

Are there research (and stories more broadly) about professional open source companies? To what types of products their are appropriate, what licensing schemes to choose? How to managed patents and IP?...
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0answers
178 views

How to solve model with a final good (in a perfect competition), and intermediate goods (monopolistic competition)?

Let's imagine there's only one final good produced by one firm, in a perfect competition market. In the intermediate market, we have $N$ goods which are produced and used as factor inputs for the ...
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1answer
259 views

Block pricing for different products

How is a block price decided when there are many products to be sold? For example the buffet in various restaurants or combos in McDonalds or KFC (like the bucket buddy). Can somebody point me to ...
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0answers
486 views

How to compute Social Welfare in this model?

The first part of this scientific article analyzes reward-based crowdfunding. The assumptions are: Seller is a monopolist Unit mass of consumers Unit demand Two periods Individuals are identified by $...
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1answer
36 views

What is a good way te represent analytically two markets with different price elasticities of demand?

It seems that two linear demand curves with different slopes would be a good way to do it, but linear demand curves are hard to work with otherwise.
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1answer
74 views

Price when both supply and demand have market power

I have an intermediate sector that operates using labor only. There is 1-1 pairs between firms and workers, with profits $$\pi = (Ap - w)\cdot 1$$ $p$ is the price, $A$ productivity, $w$ wage. ...
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91 views

Menu-pricing with three consumer groups

I want to analyze the following setting: An entrepreneur (with monopoly power) sells a product in two periods. In period 1 there are two consumer groups (denoted by 1 and 2) and in period 2 there is ...
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0answers
48 views

Estimating Demand for Goods with n Choices

I have a data set containing n observations (rows) of mobile applications. The dependent variable is the number of installations -- the variable is categorical (with more than 2 categories). Therefore ...
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1answer
792 views

University course references for Market Structure/Industrial Organization

Are there any books that are used in University-level courses that contain a detailed analysis of market structure ( Perfect competition , Monopoly and so on)?
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2answers
49 views

Is it possible to tell anything about market structure if I have annual price data of the industries?

I have three goods: beer carp (fish) museum ticket Is it possible to tell anything about market structure if I have annual price data of the industries? Here's the time-series plot on a single graph:...
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1answer
288 views

Labour markets and supply-side policies: too much stress put on the WS push factors?

In reading several macro textbooks, it seems that most of the supply-side policies tend to be focused on the labour supply side (wage setting curve), instead on the firm/labour demand side(price ...
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0answers
241 views

STATA: Estimation of Own-Price and Cross-Price Elasticities for Logit, Nested Logit, and BLP Models

I am working with some data on automobile sales and characteristics in a small country. It is an unbalanced panel dataset taken over 6 years and over 5 market segments. I am trying to construct some ...
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1answer
87 views

How to calculate the quantity of an incumbent that sets the profit of a challenger equal to 0?

I have the inverted market demand of $P=4Z-(q_1+q_2)$ and cost function of both firms is equal to $C=cq_i+f$ for $i=1,2$ So now, the existing firm wants to discourage a possible challenger to entry ...
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1answer
125 views

Cournot game with 2 firms

I have given 2 firms in a market with constant marginal costs and no fixed costs market demand has $D(p)$ The firms play a Cournot game I'm supposed to Calculate the equilibrium quantity for each ...
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1answer
424 views

Determine price and cost of intermediate good

Consider a world where an intermediate good is produced using a linear production function in a competitive market: $$ Y = qAL$$ where $q$ is the price of the intermediate good, $A$ is productivity. ...
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1answer
202 views

Market structure and price setting: Imperfect competition in the final good sector

I'm looking at an economy with two sectors. The intermediate good is produced under perfect competition and Cobb-Douglas production. There is a fixed-cost for producers to enter the final market. ...
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0answers
22 views

Is there a simple way to write a model with firms/sectors with different demand elasticities?

I would like to write down a model where there are firms with different demand elasticities: For some firm's total profits increase and decrease a lot with increases and decreases in demand for their ...
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1answer
244 views

Textbook for industrial organization without calculus

I'm planning to teach an undergraduate course in industrial organization. Calculus is not a prerequisite. I also want to avoid doing too much game theory in it so as to not be duplicative of a similar ...
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2answers
3k views

In which market structures does the producer employ price discrimination?

I was recently reading up on the Price Discrimination, first second and third degree. Although the author has laid out the concept neatly, there are no connections established between this concept and ...
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3answers
3k views

Why do low-budget films charge the same amount at the box office as super-high budget films?

In most occurrences, lower production costs translate into lower sales costs. Obviously there are other factors that influence price, including perceived value (affected by advertising), monopolies, ...
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1answer
117 views

Lemma 2 in Tirole and Maskin's Dynamic Oligpoly I (1988)

The full paper can be found here: http://www.dklevine.com/archive/refs4397.pdf. I refer here to the Lemma 2 in page 557. My doubt is regarding the first statement of the proof: "Because reaction ...
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1answer
5k views

What is the difference between Herfindahl Index and the Concentration Ratio

I was recently reading about the Herfindahl Index and from what I've learned so far, is that HHI is preferred over the Concentration Ratio. However, I didn't quite understand the reasoning that lead ...
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69 views

Manufacturing economics book?

I am interested in manufacturing economics - suppose I have to built an engine, I would like to learn a systematic approach to break down what the costs of building an engine would be and how I could ...
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2answers
58 views

Can the cyclicality of the real wage be used as a measure for the degree of competiveness in the labour market?

When reading the answers to this question of mine, I'm left wondering if cyclicality of real wages can be seen as an indicator for the nature and degree of competition in the labour market. In ...
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4answers
1k views

Should Costs of Travel to Buy Goods be Regarded as Transaction Costs?

Within the approach of New Institutional Economics associated with Oliver Williamson and others, emphasis is placed on transaction costs as a key factor in explaining why different forms of economic ...
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1answer
166 views

Monopolistic and Bertrand (Nash) Competition

Can we view the monopolistic competition equilibrium (a la Dixit-Stigliz) as the limit case of a Bertrand competition with an infinite number of firms providing differentiated products, where the ...
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1answer
144 views

When a demand function is split, how do we algebraically change function

For example, in tacit collusion for a Bertrand situation, demand would be split between the two colluding firms. How would the reflect upon the demand function? For example D = 100 - 2Q, and for ...