Structural versus Quasi-Experimental Approaches to Industrial Organization

Abstract

This paper charts some key milestones in the empirical developments in Industrial Organization, focusing on the types of questions examined and the empirical approaches adopted, specifically contrasting the structural and quasi-experimental approaches. Both have strengths and weaknesses, and both involve some art as well as science. The questions asked have become narrower but better specified.

Key Words:

• Industrial Organization
• Structure-Performance
• Endogeneity
• Structural Approach
• Quasi-Experimental Approach.

• JEL classifications:
• L10
• L60
• L80.

Notes

1. At this point, I should note that there is another approach entirely, although not one that has found broad favour, for whatever reason. The approach taken by Sutton (1991) is first to look for things that can be maintained quite broadly, for example that in larger markets, there are likely to be more firms. This then forms a firm foundation for the next stage of analysis.