Industrial organization

This article is about the field of economics. For the field of psychology, see Industrial and organizational psychology.
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In economics, industrial organization is a field that builds on the theory of the firm by examining the structure of (and, therefore, the boundaries between) firms and markets. Industrial organization adds real-world complications to the perfectly competitive model, complications such as transaction costs,[1] limited information, and barriers to entry of new firms that may be associated with imperfect competition. It analyzes determinants of firm and market organization and behavior on a continuum between competition[2] and monopoly,[3] including from government actions.

There are different approaches to the subject. One approach is descriptive in providing an overview of industrial organization, such as measures of competition and the size-concentration of firms in an industry. A second approach uses microeconomic models to explain internal firm organization and market strategy, which includes internal research and development along with issues of internal reorganization and renewal.[4] A third aspect is oriented to public policy related to economic regulation,[5] antitrust law,[6] and, more generally, the economic governance of law in defining property rights, enforcing contracts, and providing organizational infrastructure.[7][8]

The extensive use of game theory in industrial economics has led to the export of this tool to other branches of microeconomics, such as behavioral economics and corporate finance. Industrial organization has also had significant practical impacts on antitrust law and competition policy.[9]

The development of industrial organization as a separate field owes much to Edward Chamberlin,[10] Joan Robinson, Edward S. Mason,[11] J. M. Clark,[12] Joe S. Bain[13] and Paolo Sylos Labini, among others.[14][15]

  1. ^ • R. H. Coase, 1937. "The Nature of the Firm", Economica, N.S., 4(16), pp. 386–405.
     • _____, 1988. "The Nature of the Firm: Influence", Journal of Law, Economics, & Organization, 4(1), pp. 33–47. Reprinted in The Nature of the Firm: Origins, Evolution, and Development, 1993, O. E. Williamson and S, G. Winter, ed., pp. 61–74.
     • _____, 1991. "The Institutional Structure of Production", Nobel Lecture, reprinted in 1992, American Economic Review, 82(4), pp. 713–719.
     • Oliver E. Williamson, 1981. "The Economics of Organization: The Transaction Cost Approach", American Journal of Sociology, 87(3), pp. 548–577.
     • _____, 2009. "Transaction Cost Economics: The Natural Progression", Nobel Lecture. Reprinted in 2010, American Economic Review, 100(3), pp. 673–90.
  2. ^ George J. Stigler, [1987] 2008. "competition", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
  3. ^ • Luigi Zingales, 2008. "corporate governance", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
     • Oliver E. Williamson, 2002. "The Theory of the Firm as Governance Structure: From Choice to Contract", Journal of Economic Perspectives, 16(3), pp. 171–195.
     • Frederic M. Scherer and David Ross, 1990. Industrial Market Structure and Economic Performance, 3rd ed. Description and 1st ed. review extract.
      • Dennis W. Carlton and Jeffrey M. Perloff, 2004. Modern Industrial Organization, 4th edition, pp. 2–3. Description.
  4. ^ • Frederic M. Scherer and David Ross, 1990. Industrial Market Structure and Economic Performance, 3rd ed. Description and 1st ed. review extract.
     • Dennis W. Carlton and Jeffery M. Perloff, 2004. "Modern Industrial Organization, Overview", ch. 5, Handbook of Industrial Organization, Elsevier, v. 1, pp. 259–327. Fudenberg, Drew; Tirole, Jean (1989). "Chapter 5 Noncooperative game theory for industrial organization: An introduction and overview". Handbook of Industrial Organization Volume 1. Vol. 1. pp. 259–327. doi:10.1016/S1573-448X(89)01008-3. ISBN 9780444704344. S2CID 154265880.
     • Carl Shapiro, 1989. "The Theory of Business Strategy", RAND Journal of Economics, 20(1), pp. 125–137.
     • Kyle Bagwell and Asher Wolinsky (2002). "Game theory and Industrial Organization", ch. 49, Handbook of Game Theory with Economic Applications, v. 3, pp. 1851–1895 Bagwell, Kyle; Wolinsky, Asher (2002). "Chapter 49 Game theory and industrial organization". Handbook of Game Theory with Economic Applications Volume 3. Vol. 3. pp. 1851–1895. doi:10.1016/S1574-0005(02)03012-6. ISBN 9780444894281.
     • Martin Shubik, 1987. A Game-Theoretic Approach to Political Economy, Part II. MIT Press. Description. Archived May 3, 2011, at the Wayback Machine
  5. ^ Richard Schmalensee and Robert Willig, eds., 1989. Handbook of Industrial Organization, Elsevier, v. 2, Part 5, Government Intervention in the Marketplace, ch. 22–26, abstract links.
  6. ^ • Richard A. Posner, 2001. Antitrust Law, 2nd ed. University of Chicago Press. Preview.
     • D. L. Rubinfeld, 2001. "Antitrust Policy", International Encyclopedia of the Social & Behavioral Sciences, pp. 553–560. Posner, Richard A. (2009-04-22). Antitrust Law, Second Edition. ISBN 9780226675787. Archived from the original on January 7, 2017. Retrieved April 10, 2017.{{cite book}}: CS1 maint: bot: original URL status unknown (link)
  7. ^ • Avinash K. Dixit, 2008. "economic governance", The New Palgrave Dictionary of Economics, 2nd Edition. Abstract.
     • Oliver E. Williamson, 1996. The Mechanisms of Governance, "Prologue", pp. 3–20.
  8. ^ • George J. Stigler, 1983. The Organization of Industry, University of Chicago Press. Description and contents links and preview.
     • Richard Schmalensee, 1988. "Industrial Economics: An Overview", Economic Journal, 98(392), pp. 643–681. Working paper link.
     • Handbook of Industrial Organization, Elsevier:
    Richard Schmalensee and Robert Willig, ed., 1989. v. 1. Links to description & contents Archived 2012-10-02 at the Wayback Machine & (partial) chapter outlines.
    _____, ed., 1989. v. 2. Links to description & contents Archived 2012-10-02 at the Wayback Machine and chapter outlines.
    Mark Armstrong and Robert Porter, ed., 2007. v. 3. Links to description, chapter-content descriptions Archived 2012-10-02 at the Wayback Machine
  9. ^ Exemplified in such advanced textbooks as Jean Tirole, 1988, The Theory of Industrial Organization, MIT Press, description and chapter-preview links.
  10. ^ • Edward Hastings Chamberlin, 1933. The Theory of Monopolistic Competition: A Re-orientation of the Theory of Value, 1965, 8th ed. Harvard University Press.
     • R. Rothschild, 1987. "The Theory of Monopolistic Competition: E.H. Chamberlin's Influence on Industrial Organisation Theory over Sixty Years", Journal of Economic Studies, 14(1), pp. 34–54. Abstract.
     • William L. Baldwin, 2007. "Edward Hastings Chamberlin", in Pioneers of Industrial Organization, H. W. de Jong, W. G. Shepherd, ed., pp. 199–.
  11. ^ Edward S. Mason, 1939. "Price and Production Policies of Large-Scale Enterprise", American Economic Review, 29(1, Supplement), pp. 61–74.
     • _____, 1949. "The Current Status of the Monopoly Problem in the United States", Harvard Law Review, 62(8), pp. 1265–1285.
     • _____, 1957. Economic Concentration and the Monopoly Problem, Harvard University Press. Review extract.
     • William G. Shepherd, 2007. "Edward S. Mason", in Pioneers of Industrial Organization, H. W. de Jong, W. G. Shepherd, ed.
  12. ^ J.M. Clark, 1940. Toward a Concept of Workable Competition. American Economic Review, Vol. 30, No. 2, Part 1, Jun., pp. 241–256
     • William L. Baldwin, 2007. "John Maurice Clark" in Pioneers of Industrial Organization, H. W. de Jong, W. G. Shepherd, ed., pp. 183–186.
  13. ^ • Joe S. Bain, 1956. Barriers to New Competition: Their Character and Consequences in Manufacturing, Harvard University Press. Review extracts [1][2].
     • _____, 1959, 2nd ed., 1968. Industrial Organization: A Treatise, John Wiley.
     • Richard E. Caves, 2007. "Joe S. Bain", in Pioneers of Industrial Organization, H. W. de Jong, W. G. Shepherd, ed., pp. 224–231.
  14. ^ E. T. Grether, 1970. "Industrial Organization: Past History and Future Problems", American Economic Review, 60(2), pp. 83–89.
  15. ^ Oliver E. Williamson, ed., 1990. Industrial Organization, Edward Elgar. Description Archived 2011-07-22 at the Wayback Machine and article list. Archived 2014-10-24 at the Wayback Machine23 articles, dating from 1937 to 1987.