The field of Industrial organization is dedicated to the study of markets and their functioning. The past couple of decades have seen a tremendous surge in empirical papers in this area. Much of this empirical work has a distinctive feature: it is strongly motivated by theoretical foundations that describe the strategic interaction among (potential and actual) competitors, and the preferences and choices of consumers. When the empirical strategy derives directly from the optimizing behavior of these agents, the empirical approach is often referred to as “structural.”This course covers several elements of this evolving corpus of structural empirical models.

Our first module covers the modeling and empirical estimation of consumers' preferences and demand, including workhorse models used to estimate the demand for differentiated products. These models have been applied in numerous papers to study consumer choice in a multitude of industries. Knowledge of the demand structure faced by firms opens the door to many interesting questions regarding consumer welfare and its determinants, including policy questions affecting key sectors of the economy such as automobiles, airlines or computer chips. It also leads to a better understanding of firms' strategies, and of how market power is created and exercised.

 Our second module focuses on merger analysis. Mergers may lead to lower competition, harming consumers, but may also be associated with countervailing efficiency gains. We shall learn how to analyze the impact of mergers retrospectively, and also how to build on a model of demand and supply to simulate the expected outcomes of mergers before they are consummated.

 Our third and final module asks what determines the structure of markets to begin with. Why are some markets more concentrated than others? What drives firms' decisions to differentiate their offerings horizontally and vertically? Do oligopoly markets end up with efficient levels of product quality and variety?

Students will become familiar with workhorse models used to analyze consumer preferences and firm behavior in oligopoly markets. They will become familiarized with the key assumptions underlying these models and develop a critical thinking with respect to them. Students would also become well-versed in the steps necessary for empirical implementation and application of these models.

 Students are expected to attend all classes but may miss one class for any reason.

Each topic will be covered by following a sequence of influential papers. This will allow us to appreciate how our thinking about the relevant problems evolved over time, and where we stand today.

Evaluation and grading will be based on two main components.

1.Referee report  / presentation of ongoing research (80%). This is the main assignment of the course. Depending on your preference, you can choose one of the following two options.

• a.     Write a short (up to 5 pages, font 12, 1.5 spacing) report regarding a paper that I will assign to you. The paper will not be one of those we learn in class, but will be using the methods that we learn. The report must clearly identify and discuss: (i) the research question (ii) the data used in the research (iii) a decsription of the econometric method applied in the paper, and an explanation of how it allows the authors to address the research question (iv) the main results, and, most importantly, (v) a critical assessment of the paper. The report due date is March 4th and will be submitted via an e-mail to me. I will then grade and return the report to you with my feedback.
• b.       Give a presentation. On the last day of class, February 28, students who are interested in presenting their own on-going research and get feedback from me (and from the group) are welcome to do so. If you are interested in this option, please contact me by e-mail before classes begin, and concretely, by February 18th. This will allow us to communicate upfront and make sure the your intended topic is sufficiently close to the subject matter of our course.  Of note, you may present research that is very advanced, or use this opportunity to prepare an early research proposal and get feedback on it. I will provide written feedback and a grade after the course is concluded.

2. Short assignments (20%). The exact nature of those will be determined depending on the size and composition of the group.

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The course in intended for graduate students in the field of economics who have taken a basic graduate-level course in econometrics. Working knowledge of linear algebra and familiarity with basic concepts in econometrics is expected.

Please feel free to communicate with me at the e-mail address provided above, or approach me after class. I would be happy to discuss issues, answer questions and so forth.

Readings (tentative list – we may cover some of those papers in greater or smaller detail)

Affeldt, P., Duso, T., Gugler, K. P., and Piechucka, J. (2021). Market concentration in europe: Evidence from antitrust markets.

Ashenfelter, O., H. D. and Weinberg, M. (2014). Did robert bork understate the competitive impact of mergers? evidence from consummated mergers. Journal of Law and Economics, 120(3):67-100.

Berry, S. (1994). Estimating discrete choice models of product differentiation. RAND Journal of Economics, 25(2):242-262.

Berry, S., Levinsohn, J., and Pakes, A. (1995). Automobile prices in market equilibrium. Econometrica, 63(4):841-890.

Berry, S., Levinsohn, J., and Pakes, A. (2004). Differentiated products demand systems from a combination of micro and macro data: The new car market. Journal of political Economy, 112(1):68-105.

Berry, S. T. (1992). Estimation of a model of entry in the airline industry. Econometrica, 60:889-917.

Berry, S. T. and Reiss, P. (2007). Empirical models of entry and market structure. Working Paper Chapter 29, Handbook of Industrial Organization.

Björnerstedt, J. and Verboven, F. (2016). Does merger simulation work? evidence from the swedish analgesics market. American Economic Journal: Applied Economics, 8(3):125-64.

Bresnahan, T. F. and Reiss, P. C. (1991). Entry and competition in concentrated markets. Journal of Political Economy, 99:977-1009.

Conlon, C. and Gortmaker, J. (2020). Best practices for differentiated products demand estimation with pyblp. The RAND Journal of Economics, 51(4):1108-1161.

Conlon, C. and Gortmaker, J. (2025). Incorporating micro data into differentiated products demand estimation with pyblp. Journal of Econometrics, page 105926.

Döpper, H., MacKay, A., Miller, N., and Stiebale, J. (2023). Rising markups and the role of consumer preferences. Technical report.

Eizenberg, A. (2014). Upstream innovation and product variety in the us home pc market. Review of Economic Studies, 81(3):1003-1045.

Eizenberg, A., Shilian, D., and Blanga, D. D. (2023). Estimating the strategic effect of multi-market contact. Technical report, Working paper, Falk Centre for Economic Policy Research.

Eizenberg, A. and Zvuluni, O. (2024). An empirical analysis of merger efficiencies.

Grieco, P. L., Murry, C., and Yurukoglu, A. (2021). The evolution of market power in the us auto industry. Technical report, National Bureau of Economic Research.

Hendel, I., Lach, S., and Spiegel, Y. (2017). Consumers' activism: the cottage cheese boycott. The RAND Journal of Economics, 48(4):972-1003.

Igami, M. and Sugaya, T. (2022). Measuring the incentive to collude: the vitamin cartels, 1990-99. The Review of Economic Studies, 89(3):1460-1494.

Miller, N. H., Sheu, G., and Weinberg, M. C. (2021). Oligopolistic price leadership and mergers: The united states beer industry. American Economic Review, 111(10):3123-3159.

Nevo, A. (2001). Measuring market power in the ready-to-eat cereal industry. Econometrica, 69(2):307-342.

Petrin, A. (2002). Quantifying the benefits of new products: The case of the minivan. Journal of political Economy, 110(4):705-729.

Seim, K. (2006). An empirical model of firm entry with endogenous product-type choices. The RAND Journal of Economics, 37(3):619-640.

Wollmann, T. G. (2018). Trucks without bailouts: Equilibrium product characteristics for commercial vehicles. American Economic Review, 108(6):1364-1406.