Computational Issues in the Analysis of Simple IO Models: A Report from the Applied Front
There has been progress in estimating the demand and cost primitives underlying the static profit and consumer surplus functions derived from simple IO models. This delivers profits and consumer surplus as a function of the distribution of the state variables of the agents active in the market, and has lead to an increase in our ability to do short run analysis of the impact of policy or environmental changes. However the analysis of even intermediate run responses requires some analysis of how the state variables themselves respond to environmental changes. Realistic dynamic models for analyzing the response of state variables are far too complicated for us to solve analytically. On the other hand our ability to generate parameter estimates, together with some assumptions on the nature of equilibrium, should, at least modulus computational problems, allow us to do numerical analysis of these models. This talk will consider the problems and prospects we have encountered in computing Markov Perfect models (Maskin and Tirole,n1988) of industry dynamics, with an eye to generating an ability to compute models that are rich enough to be of use in applied problems. We begin by introducing the skeleton of a model that might be of use in applied work, and then consider the problems associated with computing its equilibrium.
|Date of creation:|
|Contact details of provider:|| Postal: Department of Econometrics, University of Geneva, 102 Bd Carl-Vogt, 1211 Geneva 4, Switzerland|
Web page: http://www.unige.ch/ce/ce96/welcome.html
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rust, John, 1987. "Optimal Replacement of GMC Bus Engines: An Empirical Model of Harold Zurcher," Econometrica, Econometric Society, vol. 55(5), pages 999-1033, September.
- Richard Ericson & Ariel Pakes, 1995. "Markov-Perfect Industry Dynamics: A Framework for Empirical Work," Review of Economic Studies, Oxford University Press, vol. 62(1), pages 53-82.
- Eric Maskin & Jean Tirole, 2010.
"A Theory of Dynamic Oligopoly, 1: Overview and Quantity Competition with Large Fixed Costs,"
Levine's Working Paper Archive
397, David K. Levine.
- Maskin, Eric & Tirole, Jean, 1988. "A Theory of Dynamic Oligopoly, I: Overview and Quantity Competition with Large Fixed Costs," Econometrica, Econometric Society, vol. 56(3), pages 549-569, May.
- J. Tirole & E. Maskin, 1982. "A Theory of Dynamic Oligopoly, I: Overview and Quantity Competition with Large-Fixed Costs," Working papers 320, Massachusetts Institute of Technology (MIT), Department of Economics.
- Ariel Pakes & Paul McGuire, 1992.
"Computing Markov Perfect Nash Equilibria: Numerical Implications of a Dynamic Differentiated Product Model,"
NBER Technical Working Papers
0119, National Bureau of Economic Research, Inc.
- Ariel Pakes & Paul McGuire, 1994. "Computing Markov-Perfect Nash Equilibria: Numerical Implications of a Dynamic Differentiated Product Model," RAND Journal of Economics, The RAND Corporation, vol. 25(4), pages 555-589, Winter.
- Ariel Pakes & Paul McGuire, 1992. "Computing Markov perfect Nash equilibria: numerical implications of a dynamic differentiated product model," Discussion Paper / Institute for Empirical Macroeconomics 58, Federal Reserve Bank of Minneapolis.
- Hopenhayn, Hugo & Rogerson, Richard, 1993. "Job Turnover and Policy Evaluation: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 101(5), pages 915-938, October.
- Maskin, Eric & Tirole, Jean, 1988. "A Theory of Dynamic Oligopoly, II: Price Competition, Kinked Demand Curves, and Edgeworth Cycles," Econometrica, Econometric Society, vol. 56(3), pages 571-599, May.
- Pakes, Ariel S, 1986.
"Patents as Options: Some Estimates of the Value of Holding European Patent Stocks,"
Econometric Society, vol. 54(4), pages 755-784, July.
- Ariel Pakes, 1984. "Patents as Options: Some Estimates of the Value of Holding European Patent Stocks," NBER Working Papers 1340, National Bureau of Economic Research, Inc.
- Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
- John B. Taylor & Harald Uhlig, 1989.
"Solving Nonlinear Stochastic Growth Models: A Comparison of Alternative Solution Methods,"
NBER Working Papers
3117, National Bureau of Economic Research, Inc.
- Taylor, John B & Uhlig, Harald, 1990. "Solving Nonlinear Stochastic Growth Models: A Comparison of Alternative Solution Methods," Journal of Business & Economic Statistics, American Statistical Association, vol. 8(1), pages 1-17, January.
- Bizer, David S & Judd, Kenneth L, 1989. "Taxation and Uncertainty," American Economic Review, American Economic Association, vol. 79(2), pages 331-336, May.
- Berry, Steven & Pakes, Ariel, 1993. "Some Applications and Limitations of Recent Advances in Empirical Industrial Organization: Merger Analysis," American Economic Review, American Economic Association, vol. 83(2), pages 247-252, May.
When requesting a correction, please mention this item's handle: RePEc:sce:scecf6:_043. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.