Additional Information
Book Details
Abstract
Industrial Organisation: Competition, Strategy, Policy provides a thorough treatment of the core concepts and theories underlying the economics of industrial organization.
In this new fifth edition, the authors use an array of empirical examples and case studies to analyse the structure, behaviour and performance of firms and industries.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Cover | Cover | ||
| Title Page | iii | ||
| Copyright Page | iv | ||
| Contents | vii | ||
| Preface | xxiv | ||
| Acknowledgements | xxvii | ||
| Part I: Theoretical Foundations | 1 | ||
| 1 Industrial organization: an introduction | 3 | ||
| 1.1 Introduction | 3 | ||
| 1.2 Static and dynamic views of competition | 4 | ||
| 1.3 The structure–conduct–performance paradigm | 6 | ||
| 1.4 Strategic management: a short diversion | 27 | ||
| Discussion questions | 30 | ||
| Further reading | 31 | ||
| 2 Production, costs, demand and profit maximization | 32 | ||
| 2.1 Introduction | 33 | ||
| 2.2 Production and costs | 33 | ||
| 2.3 Demand, revenue, elasticity and profit maximization | 50 | ||
| 2.4 Summary | 60 | ||
| Discussion questions | 61 | ||
| Computational questions | 62 | ||
| Further reading | 63 | ||
| 3 The neoclassical theory of the firm | 64 | ||
| 3.1 Introduction | 64 | ||
| 3.2 The neoclassical theory of the firm: historical development | 65 | ||
| 3.3 Theories of perfect competition and monopoly | 67 | ||
| 3.4 Efficiency and welfare properties of perfect competition and monopoly | 73 | ||
| 3.5 Theory of monopolistic competition | 79 | ||
| 3.6 Summary | 82 | ||
| Discussion questions | 83 | ||
| Computational questions | 83 | ||
| 4 Managerial and behavioural theories of the firm | 85 | ||
| 4.1 Introduction | 85 | ||
| 4.2 Critique of the neoclassical theory of the firm | 86 | ||
| 4.3 Separation of ownership from control: managerial theories of the firm | 89 | ||
| 4.4 The behavioural theory of the firm | 100 | ||
| 4.5 Summary | 102 | ||
| Discussion questions | 103 | ||
| Further reading | 103 | ||
| 5 Transaction costs, agency and resource-based theories of the firm | 104 | ||
| 5.1 Introduction | 104 | ||
| 5.2 The Coasian firm | 105 | ||
| 5.3 Transaction costs and the theory of the firm | 109 | ||
| 5.4 Agency theory | 113 | ||
| 5.5 Property rights and the theory of the firm | 116 | ||
| 5.6 The resource-based theory of the firm | 117 | ||
| 5.7 Summary | 120 | ||
| Discussion questions | 122 | ||
| Further reading | 122 | ||
| 6 Corporate governance | 124 | ||
| 6.1 Introduction | 124 | ||
| 6.2 Agency problems and the need for corporate governance | 126 | ||
| 6.3 Instruments of corporate governance | 129 | ||
| 6.4 Corporate governance codes of practice | 133 | ||
| 6.5 Corporate governance: implementation and empirical evidence | 136 | ||
| 6.6 Business ethics | 142 | ||
| 6.7 Corporate social responsibility | 148 | ||
| 6.8 Summary | 157 | ||
| Discussion questions | 159 | ||
| Further reading | 159 | ||
| Part II: Structural Analysis of Industry | 161 | ||
| 7 Oligopoly: non-collusive models | 163 | ||
| 7.1 Introduction | 164 | ||
| 7.2 Interdependence, conjectural variation, independent action and collusion | 165 | ||
| 7.3 Models of output determination in duopoly | 166 | ||
| 7.4 Models of price determination in duopoly | 178 | ||
| 7.5 The kinked demand curve and models of price leadership | 185 | ||
| 7.6 Summary | 190 | ||
| Discussion questions | 192 | ||
| Computational questions | 192 | ||
| Further reading | 194 | ||
| 8 Oligopoly: collusive models | 195 | ||
| 8.1 Introduction | 195 | ||
| 8.2 Collusive action and collusive forms | 196 | ||
| 8.3 Collusive institutions | 200 | ||
| 8.4 Profit-maximizing models of price and output determination for a cartel | 203 | ||
| 8.5 Other motives for collusion | 207 | ||
| 8.6 Factors conducive to cartel formation | 210 | ||
| 8.7 Influences on cartel stability | 215 | ||
| 8.8 Summary | 225 | ||
| Discussion questions | 226 | ||
| Further reading | 226 | ||
| 9 Game theory | 228 | ||
| 9.1 Introduction | 229 | ||
| 9.2 Dominance and Nash equilibrium | 230 | ||
| 9.3 The prisoner’s dilemma game | 235 | ||
| 9.4 Mixed strategies | 239 | ||
| 9.5 Sequential games | 246 | ||
| 9.6 Repeated games | 253 | ||
| 9.7 Summary | 255 | ||
| Discussion questions | 256 | ||
| Computational questions | 257 | ||
| Further reading | 259 | ||
| 10 Concentration: measurement and trends | 260 | ||
| 10.1 Introduction | 260 | ||
| 10.2 Market and industry definition | 261 | ||
| 10.3 Official schemes for industry classification | 264 | ||
| 10.4 Measures of seller concentration | 267 | ||
| 10.5 Interpretation of concentration measures | 282 | ||
| 10.6 Summary | 284 | ||
| Discussion questions | 285 | ||
| Further reading | 285 | ||
| 11 Determinants of seller concentration | 286 | ||
| 11.1 Introduction | 287 | ||
| 11.2 Seller concentration: systematic determinants | 287 | ||
| 11.3 The random growth hypothesis | 295 | ||
| 11.4 Trends in concentration and the location of industry | 304 | ||
| 11.5 Summary | 320 | ||
| Discussion questions | 322 | ||
| Further reading | 323 | ||
| 12 Barriers to entry | 324 | ||
| 12.1 Introduction | 324 | ||
| 12.2 Types of barrier to entry | 326 | ||
| 12.3 Entry-deterring strategies | 337 | ||
| 12.4 Signalling commitment | 342 | ||
| 12.5 Potential entry and contestability | 345 | ||
| 12.6 Entry and industry evolution | 347 | ||
| 12.7 Empirical evidence on entry | 349 | ||
| 12.8 Summary | 355 | ||
| Discussion questions | 357 | ||
| Further reading | 357 | ||
| 13 Market structure, firm strategy and performance | 359 | ||
| 13.1 Introduction | 359 | ||
| 13.2 Empirical tests of the SCP paradigm | 360 | ||
| 13.3 Strategic groups | 366 | ||
| 13.4 Sources of variation in profitability: industry, corporate and business unit effects | 367 | ||
| 13.5 The new empirical industrial organization (NEIO) | 372 | ||
| 13.6 The persistence of profit | 379 | ||
| 13.7 Summary | 384 | ||
| Discussion questions | 386 | ||
| Further reading | 386 | ||
| Part III: Analysis of Firm Strategy | 389 | ||
| 14 Pricing | 391 | ||
| 14.1 Introduction | 391 | ||
| 14.2 Cost plus pricing | 392 | ||
| 14.3 Price discrimination | 397 | ||
| 14.4 Peak-load pricing | 413 | ||
| 14.5 Transfer pricing | 417 | ||
| 14.6 Price dispersion | 426 | ||
| 14.7 Summary | 428 | ||
| Discussion questions | 431 | ||
| Computational questions | 432 | ||
| Further reading | 433 | ||
| 15 Auctions | 435 | ||
| 15.1 Introduction | 435 | ||
| 15.2 Auction formats and models of bidders’ valuations | 437 | ||
| 15.3 The pure common value model and the winner’s curse | 439 | ||
| 15.4 Optimal bidding strategies and revenue equivalence in the independent private values model | 442 | ||
| 15.5 Extensions and additional topics in auction theory | 449 | ||
| 15.6 Empirical evidence | 454 | ||
| 15.7 Summary | 462 | ||
| Discussion questions | 464 | ||
| Computational questions | 464 | ||
| Further reading | 465 | ||
| 16 Product differentiation | 466 | ||
| 16.1 Introduction | 466 | ||
| 16.2 Types of product differentiation | 468 | ||
| 16.3 Monopolistic competition revisited: the socially optimal amount of product differentiation | 470 | ||
| 16.4 Lancaster’s product characteristics model | 473 | ||
| 16.5 Hotelling’s location model | 480 | ||
| 16.6 Salop’s location model | 492 | ||
| 16.7 Summary | 496 | ||
| Discussion questions | 498 | ||
| Further reading | 499 | ||
| 17 Advertising | 500 | ||
| 17.1 Introduction | 500 | ||
| 17.2 Determinants of advertising expenditure | 503 | ||
| 17.3 Advertising and product characteristics | 512 | ||
| 17.4 Advertising and profit maximization | 514 | ||
| 17.5 Advertising as a barrier to entry | 520 | ||
| 17.6 Advertising, information search and quality signalling | 522 | ||
| 17.7 Is there too much advertising? | 525 | ||
| 17.8 Empirical evidence | 529 | ||
| 17.9 Summary | 532 | ||
| Discussion questions | 533 | ||
| Further reading | 534 | ||
| 18 Research and development | 535 | ||
| 18.1 Introduction | 535 | ||
| 18.2 Market structure, firm size and the pace of technological change | 536 | ||
| 18.3 Investment in research and development | 553 | ||
| 18.4 Diffusion | 560 | ||
| 18.5 Patents | 566 | ||
| 18.6 Empirical evidence | 571 | ||
| 18.7 Summary | 577 | ||
| Discussion questions | 579 | ||
| Further reading | 580 | ||
| 19 Horizontal mergers and strategic alliances | 582 | ||
| 19.1 Introduction | 582 | ||
| 19.2 Profit-maximizing motives for horizontal mergers | 584 | ||
| 19.3 Non-profit-maximizing motives for horizontal mergers | 590 | ||
| 19.4 Merger waves | 594 | ||
| 19.5 Strategic alliances | 597 | ||
| 19.6 Horizontal mergers: some empirical evidence | 599 | ||
| 19.7 Summary | 601 | ||
| Discussion questions | 602 | ||
| Further reading | 603 | ||
| 20 Vertical integration | 604 | ||
| 20.1 Introduction | 604 | ||
| 20.2 Motives for vertical integration: enhancement of market power | 605 | ||
| 20.3 Motives for vertical integration: cost savings | 612 | ||
| 20.4 Vertical disintegration | 620 | ||
| 20.5 Empirical evidence on vertical integration | 621 | ||
| 20.6 Agency and vertical relationships | 622 | ||
| 20.7 Summary | 630 | ||
| Discussion questions | 631 | ||
| Further reading | 632 | ||
| 21 Vertical restraints\r | 633 | ||
| 21.1 Introduction | 633 | ||
| 21.2 Motives for vertical restraints | 634 | ||
| 21.3 Forms of vertical restraint | 637 | ||
| 21.4 Summary | 647 | ||
| Discussion questions | 648 | ||
| Further reading | 648 | ||
| 22 Network goods and services | 649 | ||
| 22.1 Introduction | 649 | ||
| 22.2 Demand for a network product or service | 651 | ||
| 22.3 Market equilibrium price and quantity for a network good or service: perfect competition and monopoly | 658 | ||
| 22.4 Market equilibrium price and quantity for a network good or service: duopoly | 663 | ||
| 22.5 Forms of competition over standardization and compatibility | 668 | ||
| 22.6 Summary | 671 | ||
| Discussion questions | 673 | ||
| Further reading | 673 | ||
| 23 Diversification | 675 | ||
| 23.1 Introduction | 675 | ||
| 23.2 Types of diversification | 676 | ||
| 23.3 Motives for diversification | 678 | ||
| 23.4 Corporate focus and deconglomeration | 688 | ||
| 23.5 Empirical evidence | 691 | ||
| 23.6 The multinational enterprise | 696 | ||
| 23.7 Summary | 703 | ||
| Discussion questions | 705 | ||
| Further reading | 705 | ||
| Part IV: Analysis of Public Policy | 707 | ||
| 24 Competition policy | 709 | ||
| 24.1 Introduction | 710 | ||
| 24.2 Competition policy: theoretical framework | 710 | ||
| 24.3 Elements of competition policy | 717 | ||
| 24.4 Implementation of competition policy | 720 | ||
| 24.5 Summary | 737 | ||
| Discussion questions | 739 | ||
| Further reading | 739 | ||
| Appendices: Analytical Tools | 741 | ||
| Appendix 1 Mathematical methods | 743 | ||
| Appendix 2 Econometric methods | 766 | ||
| Appendix 3 Computational Solutions | 776 | ||
| Glossary | 781 | ||
| Bibliography | 793 | ||
| Index | 833 |