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Industrial organization

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This article is about the field of economics. For the field of psychology, seeIndustrial and organizational psychology.
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Ineconomics,industrial organizationis a field that builds on thetheory of the firmby examining the structure of (and, therefore, the boundaries between) firms andmarkets.Industrial organization adds real-world complications to theperfectly competitivemodel, complications such astransaction costs,[1]limitedinformation,andbarriers to entryof new firms that may be associated withimperfect competition.It analyzes determinants of firm and market organization and behavior on a continuum betweencompetition[2]andmonopoly,[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-concentrationof firms in an industry. A second approach usesmicroeconomicmodels 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 topublic policyrelated toeconomic regulation,[5]antitrust law,[6]and, more generally, the economic governance of law in defining property rights, enforcing contracts, and providing organizationalinfrastructure.[7][8]

The extensive use ofgame theoryin industrial economics has led to the export of this tool to other branches ofmicroeconomics,such asbehavioral economicsandcorporate finance.Industrial organization has also had significant practical impacts onantitrust lawandcompetition policy.[9]

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

Subareas[edit]

TheJournal of Economic Literature (JEL) classification codesare one way of representing the range of economics subjects and subareas. There, Industrial Organization, one of 20 primary categories, has 9 secondary categories, each with multiple tertiary categories.[16]The secondary categories are listed below with corresponding available article-preview links ofThe New Palgrave Dictionary of EconomicsOnline and footnotes to their respective JEL-tertiary categories and associated New-Palgrave links.

JEL: L1–Market Structure,Firm Strategy, and Market Performance[17]
JEL: L2– Firm Objectives, Organization, and Behavior[18]
JEL: L3–Non-profit organizationsandPublic enterprise[19]
JEL: L4–AntitrustIssues and Policies[20]
JEL: L5–RegulationandIndustrial policy[21]
JEL: L6– Industry Studies:Manufacturing[22]
JEL: L7– Industry Studies: Primary Products and Construction[23]
JEL: L8– Industry Studies: Services[24]
JEL: L9– Industry Studies:TransportationandUtilities[25]

Market structures[edit]

The commonmarket structuresstudied in this field are:perfect competition,monopolistic competition,duopoly,oligopoly,oligopsony,monopolyandmonopsony.

Areas of study[edit]

Industrial organization investigates the outcomes of these market structures in environments with

History of the field[edit]

A 2009 bookPioneers of Industrial Organizationtraces the development of the field fromAdam Smithto recent times and includes dozens of short biographies of major figures in Europe and North America who contributed to the growth and development of the discipline.[26]

Other reviews by publication year and earliest available cited works those in 1970/1937,[14]1972/1933,[27]1974,[28]1987/1937-1956 (3 cites), 1968–9 (7 cites),[29]2009/c. 1900,[30]and 2010/1951.[31]

See also[edit]

Main article:Outline of industrial organization

Notes[edit]

  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 inThe 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. Schererand David Ross, 1990.Industrial Market Structure and Economic Performance,3rd ed.Descriptionand 1st ed. reviewextract.
    • Dennis W. Carlton andJeffrey 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.Descriptionand 1st ed. reviewextract.
    • 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.ISBN9780444704344.S2CID154265880.
    •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. 1851–1895Bagwell, 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.ISBN9780444894281.
    •Martin Shubik,1987.A Game-Theoretic Approach to Political Economy,Part II.MIT Press.Description.ArchivedMay 3, 2011, at theWayback 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, abstractlinks.
  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.ISBN9780226675787.Archived from the original on January 7, 2017.RetrievedApril 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 contentslinksandpreview.
    •Richard Schmalensee,1988. "Industrial Economics: An Overview",Economic Journal,98(392), pp.643–681. Working paperlink.
    •Handbook of Industrial Organization,Elsevier:
    Richard Schmalensee and Robert Willig, ed., 1989. v. 1. Links todescription & contentsArchived2012-10-02 at theWayback Machine& (partial) chapteroutlines.
    _____, ed., 1989. v. 2. Links todescription & contentsArchived2012-10-02 at theWayback Machineand chapteroutlines.
    Mark Armstrongand Robert Porter, ed., 2007. v. 3. Links todescription,chapter-contentdescriptionsArchived2012-10-02 at theWayback Machine
  9. ^Exemplified in such advanced textbooks asJean Tirole,1988,The Theory of Industrial Organization,MIT Press,descriptionand chapter-previewlinks.
  10. ^• Edward Hastings Chamberlin, 1933.The Theory ofMonopolistic 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", inPioneers 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. Reviewextract.
    • William G. Shepherd, 2007. "Edward S. Mason", inPioneers 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" inPioneers 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", inPioneers of Industrial Organization,H. W. de Jong, W. G. Shepherd, ed., pp.224–231.
  14. ^abE. 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.DescriptionArchived2011-07-22 at theWayback Machineand articlelist.Archived2014-10-24 at theWayback Machine23 articles, dating from 1937 to 1987.
  16. ^A complete list of the JEL Industrial Organization codes is atJEL classification codes#Industrial organization JEL: L Subcategories.
  17. ^JEL: L10– General
    JEL: L11– Production,Pricing,andMarket structure;SizeDistribution of Firms
    JEL: L12–Monopoly;MonopolizationStrategies
    JEL: L13–Oligopolyand OtherImperfect Markets
    JEL: L14– Transactional Relationships; Contracts and Reputation; Networks
    JEL: L15– Information and Product Quality; Standardization and Compatibility
    JEL: L16 – Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
    JEL: L17–Open Source Products and Markets
  18. ^JEL: L20– General
    JEL: L21– Business Objectives of the Firm
    JEL: L22– Firm Organization and Market Structure
    JEL: L23 – Organization of Production
    JEL: L24–Contracting Out;Joint Ventures;Technology licensing
    JEL: L25 – Firm Performance: Size, Diversification, and Scope
    JEL: L26 –Entrepreneurship
  19. ^JEL: L31– Nonprofit Institutions;NGOs
    JEL: L32 –Public enterprises;Public-Private Enterprises
    JEL: L33 – Comparison of Public and Private Enterprises;Privatization;Contracting out
  20. ^JEL: L40– General
    JEL: L41 – Monopolization; HorizontalAnticompetitive Practices
    JEL: L42 – Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    JEL: L43 – Legal Monopolies and Regulation or Deregulation
    JEL: L44 – Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
  21. ^JEL: L51 –Economics of Regulation
    JEL: L52 – Industrial Policy; Sectoral Planning Methods
    JEL: L53] – Enterprise Policy
  22. ^JEL: L61 – Metals and Metal Products; Cement; Glass; Ceramics
    JEL: L62 – Automobiles; Other Transportation Equipment
    JEL: L63– Microelectronics; Computers; Communications Equipment
    JEL: L64 – Other Machinery; Business Equipment; Armaments
    JEL: L65– Chemicals; Rubber; Drugs; Biotechnology
    JEL: L66– Food; Beverages; Cosmetics; Tobacco; Wine and Spirits
    JEL: L67 – Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather
    JEL: L68 – Appliances; Other Consumer Durables
  23. ^JEL: L71 – Mining, Extraction, and Refining: Hydrocarbon Fuels
    JEL: L72 – Mining, Extraction, and Refining: OtherNonrenewable Resources
    JEL: L73 – Forest Products
    JEL: L74 – Construction
    JEL: L78 – Government Policy
  24. ^JEL: L80– General
    JEL: L81 – Retail and Wholesale Trade; e-Commerce
    JEL: L82 – Entertainment; Media (Performing Arts, Visual Arts, Broadcasting, Publishing, etc.)
    JEL: L83 – Sports; Gambling; Recreation; Tourism
    JEL: L84 – Personal, Professional, and Business Services
    JEL: L85 – Real Estate Services
    JEL: L86 – Information and Internet Services; Computer Software
    JEL: L87 – Postal and Delivery Services
    JEL: L88 – Government Policy
  25. ^JEL: L91 – Transportation: General
    JEL: L92 – Railroads and Other Surface Transportation
    JEL: L93 –Air transportation
    JEL: L94 –Electric utilities
    JEL: L95 – Gas Utilities; Pipelines; Water Utilities
    |JEL: L96 –Telecommunications
    JEL: L97 – Utilities: General
    JEL: L98 – Government Policy
  26. ^Henry W. de Jong and William G. Shepherd, ed., 2007.Pioneers of Industrial Organization.Cheltenham, UK: Elgar. Description and contentlinksandpreview.ArchivedAugust 7, 2011, at theWayback Machine
  27. ^James W. McKie, 1972. "Industrial Organization: Bo xing the Compass", ch. 1 inV. R. Fuchs,ed.,Policy Issues and Research Opportunities in Industrial Organization,NBER, pp.1-15.
  28. ^Almarin Phillipsand Rodney E. Stevenson, 1974. "The Historical Development of Industrial Organization",History of Political Economy,6(3), pp. 324–342. In Papers from the First Conference of the History of Economics Society.Citation.
  29. ^Timothy F. Bresnahan and Richard Schmalensee, 1987. "The Empirical Renaissance in Industrial Economics: An Overview",Journal of Industrial Economics,35(4), pp.371–378.
  30. ^Lefteris Tsoulfidis, 2009. "Between Competition and Monopoly",Competing Schools of Economic Thought,ch. 9, pp.213–42.Springer
  31. ^Liran Einav andJonathan Levin,2010. "Empirical Industrial Organization: A Progress Report",Journal of Economic Perspectives,24(2), pp.145–162.

References[edit]

  • Tirole, Jean (1988).The Theory of Industrial Organization,MIT press.
  • Belleflamme, Paul & Martin Peitz, 2010.Industrial Organization: Markets and Strategies.Cambridge University Press.SummaryandResources
  • Cabral, Luís M. B., 2000.Introduction to Industrial Organization.MIT Press. Links toDescriptionand chapter-previewlinks.
  • Shepherd, William, 1985.The Economics of Industrial Organization,Prentice-Hall.ISBN0-13-231481-9
  • Shy, Oz, 1995.Industrial Organization: Theory and Applications.Descriptionand chapter-previewlinks.MIT Press.
  • Vives, Xavier, 2001.Oligopoly Pricing: Old Ideas and New Tools.MIT Press.Descriptionand scroll to chapter-previewlinks.
  • Jeffrey Church & Roger Ware, 2005. "Industrial Organization: A Strategic Approach", (akaIOSAArchived2016-12-08 at theWayback Machine)”, Free Textbook
  • Nicolas Boccard, 2010. "Industrial Organization, a Contract Based approach (akaIOCBArchived2015-08-01 at theWayback Machine)”, Open Source Textbook

Journals[edit]

External links[edit]

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