2 DEA Bain Mann Strickland and Weiss Structure Conduct Performance S-C-P Brozen Demsetz

1

2 DEA Bain Mann Strickland and Weiss Structure Conduct Performance S-C-P Brozen Demsetz

3 Ravenscraft Bothwell et. al Smirlock et. al New Industrial Organization NIO New Empirical Industrial Organization NEIO NEIO Martin

4 NEIO Kim and Singal Pakes and McGuire Ericson and Pakes Besanko and Doraszelski n i q i c i Q n i q i p p p q,,q n p Q p Q q i MR

5 MR p Q q i p dp q i dq q i i p dp dq q i c i p c i p dp dq Q p q i Q η s i p c i p pq i c i q i pq i s i η η dq Q dp p dq dp p Q s i q i Q Cowling and Waterson π n π pq p c i p i n i s i η s i q i Q n i s i η H.I η Price-Cost Margin PCM PCM HI

6 η Q n p a bq a b q q i a bq b q i n i n i q i TR pq a bq b n i q i q n i n i MR TR a bq q b q i MC c MR MC n i a b q i c q b q c q c i c j s i s j i c i c j i j

7 C q i, q j ; w i,,w m C q i ; w i,,w m C q j ; w i,,w m C q w

8 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Berry n i B s i s i i Berry B Berry

10 0.2 0.18 0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

11 DEA Data Envelopment Analysis DEA DEA I I x P OQ OP c x P c x c x k C c x c x k k k Q OR OQ C DEA DEA A B R Q P C D * * * * O

12 Cooper et al. DEA-New-Cost DEA-New-Cost PROFIT α β SHARE β PRODUC β HI SHARE α β DIVERS β DEAC PROFIT SHARE HI PRODUC DIVERS Berry DEAC DEA β β β β β β DEAC β

13 MODEL MODEL MODEL MODEL Eqation Coefficient Prob. Coefficient Prob. Eqation Coefficient Prob. Coefficient Prob. CONST -.. -.. CONST.... SHARE.... SHARE -.. -.. PRODUC.... PRODUC.... HI -.. -.. HI.... DUMMY.... Eqation DUMMY.... CONST.... DIVERS -.. -.. Eqation MC -.. CONST.... DEAC.. DIVERS -.... MC.. MODEL MODEL DEAC -.. Eqation Coefficient Prob. Coefficient Prob. DUMMY.... CONST -.. -.. DUMMY.... SHARE.... PRODUC.... MODEL MODEL HI -.. -.. Eqation Coefficient Prob. Coefficient Prob. DUMMY -.. -.. CONST.... SHARE -.. -.. Eqation Coefficient Prob. Coefficient Prob. PRODUC.... CONST.... HI.... DIVERS.... MC -.. Eqation DEAC.. CONST.... DUMMY.... DIVERS -.. -.. MC.. MODEL MODEL DEAC -.. Eqation Coefficient Prob. Coefficient Prob. CONST.... MODEL MODEL SHARE -.. -.. Eqation Coefficient Prob. Coefficient Prob. PRODUC.... CONST -.. -.. HI.... SHARE.... DUMMY -.. -.. PRODUC.... HI -.. -.. Eqation CONST.... Eqation DIVERS -.. -.. CONST.... MC.. DIVERS.. -.. DEAC -.. MC -.. DUMMY.... DEAC.. MODEL MODEL MODEL MODEL Eqation Coefficient Prob. Coefficient Prob. Eqation Coefficient Prob. Coefficient Prob. CONST.... CONST.. -.. SHARE.... SHARE.... PRODUC.... PRODUC.... HI -.. -.. HI -.. -.. Eqation Eqation CONST.. -.. CONST.... DIVERS -.... DIVERS -.. -.. MC -.. MC -.. DEAC.. DEAC.. P

14 MODEL MODEL DEA SHARE DEA

15 PROFIT.. SHARE. Dummy... SHARE.. DIVERS. Dummy... Dummy P MODEL

16 DEA PCM S-C-P PCM PCM

17 PCM α β HI β PRODUI PCM HI PRODUI OLS PCM.. HI. PRODUI... PCM PROFIT it α β SHARE it β PRODUC it β HI t PROFIT SHARE HIPRODUC Fixed Effect MODEL Random Effect MODEL Coefficient Prob. Coefficient Prob. CONST.... SHARE.... HI.... PRODUC.... Cross-section random χ.. P

18 Fixed Effect Model Random Effect Model

19 NEIO Reiss and Wolak Rust Ackerberg et al. H.I. H.I. H.I. H.I.

20 DEA-New-Cost Cooper et al. pp. - TFP Bain, J.S. Relation of Profit Rate to Industry Concentration: American Manufacturing, -, Quarterly Journal of Economics,, pp. -. Bain, J.S. Barriers to New Competition, Harvard University Press. Barton, D.M. and Sherman, R. The Price and Profit Effect of Horizontal Merger: A Case Study, Journal of Industrial Economics,, pp. -. Berry, S., Levinsohn, J. and Pakes, A. Automobile Prices in Market Equilibrium, Econometrica,, pp. -. Besanko, D. and Doraszelski, U. Capacity Dynamics and Endogenous Asymmetries in Firm Size, RAND Journal of Economics,, pp. -. Bresnahan, T.J. Sutton s Sunk Costs and Market Structure: Price Competition, Advertising, and the Evolution of Concentration, Rand Journal of Economics,, pp. -. Bothwell, J.L., Cooley, T.F. and Hall, T.E. A New View of the Market Structure? Market Performance Debate, Journal of Industrial Economics,, pp. -. Brozen, Y. The Persistence of High Rates of Return in High Stable Concentration Industries, Journal of Law and Economics,, pp. -. Cowling, K. and Waterson, M. Price-Cost Margins and Market Structure, Economica,, pp. -. Coelli, T., Rao, D.S.P. and Battese, G.E. An Introduction to Efficiency and Production Analysis, Kluwaer Academic Publishers. Cooper, W.W., Lawrence, M.S. and Zhu, J. Handbook on Data Envelopment Analysis, Kluwaer Academic Publishers. Demsetz, H. Two Systems of Belief about Monopoly, in Goldshmid, H.J., Mann, H.M. and Weston, J.F. eds, Industrial Concentration: The New Learning Columbia

21 University Center for Law and Economic Studies. Ericson, R. and Pakes, A. Markov-Perfect Industry Dynamics: A Framework for Empirical Work, Review of Economic Studies,, pp. -. Kim, E.H. and Singal, V. Mergers and Market Power: Evidence from the Airline Industry, American Economic Review,, pp. -. Mann, H.M. Seller Concentration, Barriers to Entry and Rates of Return in Thirty Industries,-, Review of Economics and Statistics,, pp. -. Martin, S. Market Power and/or Efficiency? Review of Economics and Statistics,, pp. -. Martin, S. Advanced Industrial Economics, nd edition, Blackwell. Pakes, A. and McGuire, P. Computing Markov-Perfect Nash Equilibria: Numerical Implications of a Dynamic Differentiated-Product Model, RAND Journal of Economics,, pp. -. Ravenscraft, D. J. Structure-Profit Relationships at the Line of Business and Industry Level, Review of Economics and Statistics,, pp. -. Reiss, P. and Wolak, F. Structural Econometric Modeling:Rationales and Examples from Industrial Organization, Heckman, J. and Leamer, E. ed. Handbook of Econometrics, Vol. a, Ch., pp.-. Rust, J. Structural Estimation of Markov Decision Processes, Engle, R. and McFadden, D. ed. Handbook of Econometrics, Vol., pp.-. Schmalensee, R.C. Do market Differ Much? American Economic Review,, pp. -. Schmalensee, R. Inter-Industry Studies of Structure and Performance, in Schmalensee, R. and Willing, R.D. eds, Handbook of Industrial Organization, North -Holland. Scott, J.T. and Pascoe, G. Beyond firm and Industry Effects on Profitability in Imperfect Markets, Review of Economics and Statistics,, pp. -. Smirlock, M., Gilligan, T. and Marshall, W. Tobin s q and the Structure Performance Relationship, American Economic Review,, pp.-. Strickland, A.D. and Weiss, L.W. Advertising, Concentration and Price-Cost Margins, Journal of Political Economies,, pp.-. pp. - pp. -

22 DEA SFA pp. - pp. - -- pp. - pp. - pp. -