Empirical Industrial Markets

2024/2025

Academic Year

ENG

Instruction in English

7

ECTS credits

Delivered at:

Department of Economics

Course type:

Compulsory course

When:

4 year, 1, 2 module

Instructors

Suzdaltsev, Alex

Терещенко Дмитрий Сергеевич

Course Syllabus

Abstract

The discipline "Empirics of Industrial Markets" aims to deepen students' knowledge of the analysis of industrial markets in the direction of empirical analysis of applied economic issues. The main topic is the empirical estimation of demand functions.Correct estimation of demand systems is important for improving decision making both at the level of an individual firm (what prices for goods to set?) and at the level of a market regulator (to allow a merger of firms or not?).In the course, we will consider both the classical approach based on the theory of a representative consumer, and the more modern approach based on discrete choice models that has gained popularity over the past 30 years. In this modern and rather realistic approach, it is assumed that consumers are heterogeneous (heterogeneous), the number of consumers is very large, but each individual consumer makes a choice only from a finite number of alternatives (chooses which product to buy).In addition, we will consider the methodology and tools for assessing production functions, as well as assessing the type of competition in the market. If there is time, we will cover more advanced topics, such as the evaluation of entry patterns and models and endogenous product quality (endogenous positioning of the firm in the market).

Learning Objectives

• - introduce students to modern methodology and tools for estimating demand functions - introduce students to modern methodology and tools for assessing production functions - introduce students to the modern methodology for assessing the type of competition in the market - give an introduction to the field of structural econometrics - improve the general econometric culture of students

Expected Learning Outcomes

• - obtaining theoretical knowledge in the field of classical and modern approaches to estimating systems of demand functions
• - mastering a modern approach to estimating systems of demand functions in practice
• - obtaining theoretical knowledge in the field of evaluation of production functions
• - obtaining theoretical knowledge in the field of evaluating the type of competition in the market
• - mastering practical skills in the field of assessing production functions
• - mastering practical skills in the field of assessing the type of competition in the market
• - increasing the overall econometric culture

Course Contents

• Part 1. Introduction
• Part 2: Demand Function Estimation: Representative Consumer (Approach 1)
• Part 3. Demand Function Estimation: Discrete Choice (Approach 2)
• Part 4. Evaluation of the production function
• Part 5. Static models of competition in terms of prices and volumes, assessment of the type of competition
• Part 6 Empirical Market Entry Models
• Part 7. Evaluation of models with endogenous quality (characteristics of goods).

Assessment Elements

• test papers
  (по одной по каждой из двух частей курса)
• Homework

Interim Assessment

• 2024/2025 2nd module
  0.2 * Homework + 0.2 * Homework + 0.3 * test papers + 0.3 * test papers

Bibliography

Recommended Core Bibliography

• Berry, S., Levinsohn, J., & Pakes, A. (1995). Automobile Prices in Market Equilibrium. Econometrica, (4), 841. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.ecm.emetrp.v63y1995i4p841.90
• Discrete choice methods with simulation, Train, K.E., 2009
• Empirical industrial organization. Vol.1: ., , 2004
• Empirical industrial organization. Vol.2: ., , 2004
• Steven T. Berry. (1994). Estimating Discrete-Choice Models of Product Differentiation. RAND Journal of Economics, (2), 242. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.rje.randje.v25y1994isummerp242.262

Recommended Additional Bibliography

• Olley, G. S., & Pakes, A. (1996). The Dynamics of Productivity in the Telecommunications Equipment Industry. Econometrica, (6), 1263. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.a.ecm.emetrp.v64y1996i6p1263.97

Authors

• BRODSKAYA NATALYA NIKOLAEVNA
• SUZDALTSEV Aleksei IGOREVICH