Empirical Methods in Industrial Organization
Thursday, 12:00-1:00; Friday 10:00-12:00.
This course teaches how to bring industrial organization theory to data and vice-versa. Each week, the focus will be on a different topic. These include monopoly and competition, cartels and collusion, entry and market structure, price discrimination, information and competition, technological change and competition, and empirical analysis of auctions and organizations. Each of these topics will be investigated through the lens of recent empirical papers.
This course is the third course in the graduate sequence in industrial
organization. It is a requirement for those taking industrial organization
as a field. Those not taking industrial organization are welcome as well.
First-year graduate econometrics is a prerequisite. I strongly encourage
those of you wishing to write empirical dissertations in industrial organization
to take econometric courses beyond the first year as well.
You are required to read each assigned paper closely before you come to class. These are available at graduate reserve. This is a subset of that I have compiled.
You are also required to submit a research proposal by Monday of examination week. This is on the topic of your choice, and should be 5-6 pages. Use this to get started on your own research agenda. At a minimum, it should contain a clear statement of your research question(s), why it is important, and how you intend to go about answering it. You should then use the remainder to summarize what the existing literature has to say about your research question and describe the data or theory you intend to apply. This should be written like the introduction of a good paper. Because the length of this written assignment is short, it is important that what you write be of high quality. Once you have written a high quality statement of your research agenda, you will have a strong foundation from which to move forward.
I will require a 2-3 page abstract of your paper midway through the course. Although I will not explicitly lecture from it, you are required to know the theoretical counterparts to the empirical papers we cover. A good source for much of this is Tirole, The Theory of Industrial Organization. It is available on reserve. However, if you plan on being in the field, this is a good book to purchase and have on hand. I would venture to say that over 90% of people working in IO have a copy of Tirole on their shelf. The Handbook of Industrial Organization is also a very useful reference. It is also on reserve.
You are required to complete analyses of one or two papers not on the reading list that I will hand out in class. These take the form of referee reports. Further details will follow.
Students in the economics program are also required to hand in short assignments based on the previous Monday's workshop. Taking no more than 1 1/2 pages you have to (a) state what the research question was, and (b) state what the most interesting question or point that was made in the seminar, and why you believe this question or point to be interesting. This should take no more than 45 minutes to complete. There are 10 workshops during the quarter. You must complete this assignment for 6 of the 10 seminars, and hand it in the Thursday immediately following the seminar.
There are no problem sets in this class, and no final examination.
My teaching style is decidedly Socratic. Classes will be more discussion-based than lecture-based. You are expected to prepare well and lend insight for your colleagues (and your professor!). Before each class, I will prepare several questions about the reading. These will be available on the web. Be prepared to be cold-called on these questions during class.
The best way to prepare for class is to outline each paper. One useful task might be to make believe that you have been asked to referee the paper for a journal and outline your referee's report.
In general, you should ask yourself: What is the research question?
What is the economic model the author is using toward answering the research
question? What is the econometric model that he or she is applying? How
does the econometric model correspond to the economic model? What is the
most important empirical relationship? What economic phenomenon does the
author say it reflects? What else might it reflect? If you can answer these
questions well, then you probably understand the paper well.
Grades will be based 25% on your paper, 35% on the referee reports and
seminar assignments, and 40% on your performance in class.
Times for office hours Thursday, 3:30-5:30. The best way to get in touch with me -- for any reason -- is by email.
Any other questions? Please ask.