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Theory and Empirical Work on Imperfectly Competitive Markets

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  • Ariel Pakes

Abstract

This paper reviews recent methodological developments in the empirical analysis of imperfectly competitive markets highlighting outstanding problems. Some of these problems are econometric; e.g. the need for a deeper understanding of the small sample properties of our estimators. Most of the other problems relate to issues which have been a central part of ongoing research programs in economic theory for some time. We consider ways in which applied work can cope with these problems and, in so doing, also inform theory. The use of estimators based on moment inequalities opens up several possibilities in this regard and a detailed discussion of the assumptions used to rationalize these estimators is provided. An example, the analysis of contracts in buyer-seller networks, is used to highlight these points.

Suggested Citation

  • Ariel Pakes, 2008. "Theory and Empirical Work on Imperfectly Competitive Markets," NBER Working Papers 14117, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:14117
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    References listed on IDEAS

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    Cited by:

    1. Steven N. Durlauf & Yannis M. Ioannides, 2010. "Social Interactions," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 451-478, September.
    2. Robin S. Lee, 2013. "Vertical Integration and Exclusivity in Platform and Two-Sided Markets," American Economic Review, American Economic Association, vol. 103(7), pages 2960-3000, December.
    3. James W. Roberts, 2013. "Unobserved heterogeneity and reserve prices in auctions," RAND Journal of Economics, RAND Corporation, vol. 44(4), pages 712-732, December.
    4. Mikael Juselius & Moshe Kim & Staffan Ringbom, 2015. "Do markup dynamics reflect fundamentals or changes in conduct?," Empirical Economics, Springer, vol. 48(3), pages 1119-1147, May.
    5. Paul B. Ellickson & Stephanie Houghton & Christopher Timmins, 2010. "Estimating Network Economies in Retail Chains: A Revealed Preference Approach," NBER Working Papers 15832, National Bureau of Economic Research, Inc.
    6. Clarke, George, 2012. "Manufacturing firms in Africa: Some stylized facts about wages and productivity," MPRA Paper 36122, University Library of Munich, Germany.
    7. Aradillas-Lopez, Andres, 2012. "Pairwise-difference estimation of incomplete information games," Journal of Econometrics, Elsevier, vol. 168(1), pages 120-140.
    8. repec:zbw:bofrdp:2009_012 is not listed on IDEAS
    9. Daley, Brendan & Sadowski, Philipp, 2017. "Magical thinking: A representation result," Theoretical Economics, Econometric Society, vol. 12(2), May.
    10. Maican, Florin G., 2012. "From Boom to Bust and Back Again: A dynamic analysis of IT services," Working Papers in Economics 543, University of Gothenburg, Department of Economics.
    11. Mikael Juselius & Moshe Kim & Staffan Ringbom, 2015. "Do markup dynamics reflect fundamentals or changes in conduct?," Empirical Economics, Springer, vol. 48(3), pages 1119-1147, May.

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    More about this item

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • L0 - Industrial Organization - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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