EconEmpiricalStudiesinIndustrialOrganizationecon产业组织的实证研究

EconEmpiricalStudiesinIndustrialOrganizationecon产业组织的实证研究第1页/共303页ThiscourseMygoalIntroducetherecentempiricalstudiesinindustrialorganization(IO)whatisIO?GiveyousomesenseofhowtoconductempiricalresearchinempiricalIOOfferanopportunitytodesignyourownresearchLearnaboutChineseeconomyandexploreresearchtopicsinChinaRationalelearnfromeachotherfreetocriticizeorgivefeedbackencourageclassdiscussion第2页/共303页WhatmakesagoodEmpiricalIOEconomist?AgoodempiricalIOstudyshouldbeagoodmatchofIOtheory,realdata,andempiricalestimationstartwithaninterestingandimportantquestionbeagoodconsumeroftheoreticalliteraturebeagoodconsumerofeconometricsbeanentrepreneurindatacollectionemphasizeempiricalidentificationclarifymainstoryandalternativeexplanations第3页/共303页NewSyllabus(changesinred)5themes,eachthemehas:2-4papersforlecture,1casediscussionor1studentpresentationstudentsareexpectedtoreadpapersbeforeclassengageinclassdiscussion(20%)2refereereports(40%)Duedates:April4,April24ResearchProposaldueJune15(40%)Yourownidea(original)Reviewofrelatedliterature,clarifyyourcontributionDesigndatarequirementsandestimationstrategyPresentinfrontoftheclass(30-min,optional)第4页/共303页CommonshorthandAEJ:AmericanEconomicJournalAER:AmericanEconomicReviewEJ:EconomicJournalEI:EconomicInquiryJPE:JournalofPoliticalEconomyJEMS:JournalofEconomics&ManagementStrategyJF:JournalofFinanceJIE:JournalofIndustrialEconomicsJHE:JournalofHealthEconomicsNBER-WP:NationalBureauofEconomicResearch(NBER)workingpaperQJE:QuarterlyJournalofEconomicsRAND:RANDJournalofEconomicsReStat:ReviewofEconomicStatisticsReStud:ReviewofEconomicStudiesRQ:researchquestionSSRN:SocialScienceResearchNetwork第5页/共303页Theme#1:PricingStrategyDefinitionofPriceDiscriminationPricediscriminationinautomobilesAyresandSiegelmanAER95GoldbergJPE96Whydiscriminate?ListQJE2004AnexampleofstructuralestimationonsecondaryticketmarketLeslieandSorensen,Stanfordworkingpaper2008第6页/共303页DefinePriceDiscriminationSimilarproductsaresoldtodifferentconsumersatdifferentprices,andthedifferenceinpricecannotbeexplainedbyanydifferenceincost.Typesofpricediscrimination:First-degreeSecond-degreeThird-degree第7页/共303页NecessaryConditions

forPriceDiscriminationThereexistssomeconsumerheterogeneityFirm(s)havesomedegreeofmarketpower(i.e.downwardslopingdemand)Noarbitrage第8页/共303页Whyareresearchersinterestedin

pricediscrimination?TheRobinson-PatmanActof1936makesitunlawfultodiscriminatebyraceandgenderwelfareimplicationonpricediscriminationisambiguousProfit-maximizingsellersalwayspreferpricediscriminationtouniformpriceComparedtouniformpricing,consumersthatarediscriminatedagainstwillbeworseoffbuttheotherconsumerswillbebetteroff第9页/共303页Empiricallydetect

pricediscriminationneeddataontransactionpricecostdifferencevs.mark-updifferenceconsiderthepossibilityofarbitragedefinemarketpower:petitivemarkets第10页/共303页AyresandSiegelman1995AERRQ:Istherethirddegreepricediscriminationinnewcarretailmarkets?Whyinteresting?Itisunlawfultodiscriminatebyraceandgender(Robinson-PatmanActof1936)RentdistributionbetweencarmanufacturersandcardealersShedlightonthepricingstrategyofdealers/manufacturers–whynegotiateratherthanchargelistprice?

第11页/共303页AyresandSiegelman1995AER

ResearchDesignChicagoarea,9carmodelsMatchedpairsofindividualconsumers,onlydifferbyraceandgenderFollowexactlythesamebargainingprocess(twoprocesses?)Recordeverynegotiationprice,includingthefinaloffersevenifthereisadisagreementWhyuseacontrolledexperiment?

第12页/共303页AyresandSiegelman1995AER

Findings

InitialFinalWhitemale00Whitefemale200+130+Blackfemale450+440+Blackmale1000+1100+第13页/共303页AyresandSiegelman1995AER

PossibleInterpretationsTherearesignificantpricedifferencesbyraceandgenderThisdoesnotdisappearforblackdealersNotsurewhetheritisdrivenbyanimusdiscriminationorbystatisticaldiscriminationAnimus:distasteofdoingbusinesswithminoritiesStatistical:useobservablecharacteristicstomakestatisticalinferenceaboutthereservationvalueofconsumersLittledifferencebetweeninitialandfinaloffers,probablybecausethe“consumers”followexactlythesamebargainingprocess.Forthesamereason,itdoesnotdetectanydiscriminationbasedonbargainingabilitySpecifictoChicagoandtheninetestedcarmodels?

第14页/共303页Goldberg1996JPE

ComparisonwithAyresandSiegelman95Samequestionbutdifferentresearchdesign:

A&S95Goldberg96AuditstudyCESobservationalAreaChicagoWholeUSConsumersInd.testersFam./HHStrategySamebargainingPotentiallydifferentbargainingModel9carmodelsAlarge#ofmodelsPriceEverynegotiationpriceOnlythefinalprice,withmeasurementerror第15页/共303页Goldberg1996JPE

FindingscomparisonTheraceandgenderdifferenceinfinalpriceisnotaslargeandnotstatisticalsignificant

A&S95Goldberg96InitialPFinalPFinalPWhitemale000Whitefemale200+130+120-130+Blackfemale450+440+426+Blackmale1000+1100+274+第16页/共303页Whydifferent?SampledifferenceGoldbergsubjectstosampleselection(ononlyfinishedsalesandself-selectionintodealerships)GoldberghasmeasurementerrorsonbothleftandrighthandsidevariablesGoldbergcoverslargerareasandmorecarmodelsGoldbergcapturesdiscriminationsthatareassumedawayinA&S?DiscriminationbybargainingInitialoffersreflectstatisticaldiscriminationbyraceandgender,butdiscriminationbybargainingcancelsouttheinitialdiscrimination?

第17页/共303页MoredetectionFirstofferdoesnotnecessarilyreflectthemeantransactionpriceFirstoffercoulddiffersubstantiallyifthemeantransactionpriceisthesameacrossraceandgenderbutthedistributionofreservevalueismoredispersedforminoritiesandfirstofferreflectstheuppertailCheckvarianceofprice(Table4),quantileregression(Table3)

第18页/共303页Follow-upstudiesHarlessandHoffer(AERMarch2002)“DoWomenPayMoreforNewVehicles?EvidencefromTransactionPriceData”UsetransactionpricefromJ.D.PowerFinddiscriminationbycartypeandagegroup,butnotbygenderScottMortonetal.(2002)“ConsumerInformationandPriceDiscrimination:DoestheInternetAffectthePricingofNewCarstoWomenandMinorities?”SSRN#288527ThesameJ.D.PowertransactionpricedataAfrican-AmericanandHispanicspay2%($500)moreinofflinetransaction,but65%ofthisdifferencecanbeexplainedbyotherobservables.FindnoevidenceforstatisticalracediscriminationSmallpricepremiumforwomen(0.43%,$100)NosignificantdifferenceinonlinepriceInternetprovideslesscueforracialdiscrimination--noInterneterasessearchcost–yesConclusion:discriminationonnon-racialdifferencesacrossindividuals,notstatisticaldiscriminationbasedonrace--maybetheindividualcharacteristicsarerevealedinthebargainingprocess?

第19页/共303页ListQJE2004Sourceofobserveddiscrimination:AnimusStatisticalBargainingabilityFieldexperiment(differentfromanauditstudylikeA&S95)TradersendogenouslyselectintothemarketMorelikelyhavepreviousexperiencebuying,sellingandtradingActivecontrolonconfoundingfactors第20页/共303页ListQJE2004

ExperimentalITreatmentB:NondealerbuyersnegotiatewithdealersellersTreatmentS:NondealersellersnegotiatewithdealerbuyersFourgroups:whitemaleaged20-30 whitefemaleaged20-30 non-whitemaleaged20-30 whitemaleaged60+

第21页/共303页ListQJE2004

resultsonexperimentIResultsofTreatmentBandTreatmentS:Initialofferstominoritiesareinferior.Finaloffersareinferiortominoritiestoo,butthedifferenceisnotasgreatastheinitialoffers.Previousexperienceofnon-dealershelpeliminatetheminoritybias,butittakeslongerinnegotiation.Experienceddealersexercisemorediscriminationthannon-experienceddealers.Theseresultsprovetheexistenceofpricediscrimination,butdonotdistinguishbetweenthethreepossiblesourcesofdiscrimination

第22页/共303页ListQJE2004

Whereisthesmokinggun?Dictatorgameofadealersplitting$5toapersonthatbelongstoaspecificdemographicgroup(doubleblinddesignwithopaqueenvelopeandblankpaper)noevidenceofanimusdiscrimination第23页/共303页ListQJE2004

Whereisthesmokinggun?ChamberlainExperiment:Buyerreservationvaluesarerandomlydrawn,butsellersmayormaynotknowthisTreatmentRandomTreatmentUnclearWhythesetwotreatmentscanidentifystatisticaldiscriminationfromdiscriminationbybargainingability?

第24页/共303页ListQJE2004

Whereisthesmokinggun?ResultsTreatmentrandomvs.TreatmentclearMajoritybuyersdobetterthanminoritybuyers,butonlyinTreatmentUnclearExperienceddealersdobetterthaninexperienceddealers(moreobviousinTreatmentRandom)ExperienceddealersdoworseinTreatmentUnclearthanexperienceddealersinTreatmentRandomConclusion:Statisticaldiscriminationismorelikelythandiscriminationbybargainingability

第25页/共303页ListQJE2004

Whereisthesmokinggun?TheactualdistributionofconsumerreservationvalueSolicitedbyVickey’ssecondpriceauctionAskdealerstomatchtwoconsumer-valuedistributionswithspecificdemographicgroups

第26页/共303页ListQJE2004

ConclusionandremainingquestionsStatisticaldiscriminationisthemostlikelyexplanationExperienceddealersusetheirknowledgetoexercisemorestatisticaldiscrimination(whydoesittakelongtolearnthis?)Experimentereffectonthedictatorgame?Whathappenedduringthenegotiation(inExperimentIandtheChamberlainmarket)?Willthisonlyapplytonegotiationmarkets?WhyList(2004)andScottMortonetal.(2002)reachdifferentconclusion?

第27页/共303页RelatedstudiesRustandHallJPE2003“MiddlemenversusMarketMakers:ATheoryofCompetitiveExchange”Marketmakersvs.secretpriceWhypostingpricevs.bilateralbargaining?PricesearchiscostlyGong(2006)dissertationextendsRustandHallEndogenousentryofmarketmakersCollusionofmarketmakers?LabexperimentsListandPrice(2005RAND):fieldexperimentsincollusionandsecretpricecuts–dependsoninformationandexperienceNASDAQvs.NYSE?MatthewWhite(UpennWharton,workinginprogress):theimpactofcentralizedtradingonthepriceofwholesaleelectricity

第28页/共303页CaseDiscussionTheChildren'sHospitalofTianjinhasstartedtosellthreetypesofconsumercards.Theyallowcardbuyersahigherprioritytomakedoctorappointmentatthehospital.(NewsreportedinBeijingQingNianBao2/18/2009)Classdiscussion–fivegroupsofstudents,eachrepresentsadifferentplayerinthisproblemHospitalBroker(whoissuesthecardsforthehospital)PatientsthathaveboughtorwillbuythecardsPatientsthatdonotwanttobuythecardsRegulator

第29页/共303页Leslie&Sorensen(2008)“TheWelfareEffectsofTicketResale”Widespreadhostilityagainstticketresale,recenttrendsinfavorofticketresale(e.g.MLB,artists)Economicintuition:voluntarytradeshouldenhanceefficiencyandresultinanallocationthatimprovesocialwelfareEconomicplayers:PrimaryproducersBrokers(scalpers)Tradingintermediaries(eBayandStubHub)ConsumersRegulators

第30页/共303页Whyresale?ConsumerdemandchangesbetweentheprimaryandsecondarymarketsPrimarymarketismis-pricedsellerstakepridein“soldout”,sometimesformarketingreasonssellershavedifficultyanticipatingthedemandpreciselyseatqualityvariestoagreatdealbutonlyalimitednumberofpricingpointsareallowedintheprimarymarket

第31页/共303页ResearchQuestionMeasurethewelfareeffectofticketresale:whoisbetterofforworseoffbytheintroduction(orshow-down)ofticketresale?MeasureitforeachplayerfirstandthensumupthetotalwelfareeffectsprimaryproducersBrokers(scalpers)TradingintermediariesConsumers

第32页/共303页LiteratureEffectofresaleonprimarysellersDifference-in-Differencebyvariationsinstateanti-scalpinglaws(Williams1994,Depken2007)DepVar=primaryprice,MixedresultsTheories:Swofford99,Courty03,KarpandKerloff05,Geng,WuandWinston04)0or+dependingonassumptionsaboutdemanduncertainty,brokerriskattitude/cost/revenue/informationEffectofresaleonconsumersPro:easieraccesstotheeventCon:higherpriceDifferbytypeofconsumersElfenbein2005:stricteranti-scalpinglawsreducescompetitionamongresellers,leadingtofewerticketssoldandhigherprices

第33页/共303页Howdoesresalework?Stage0:primarysellerssetprimarypricesStage1:ConsumersandbrokersparticipateintheprimarymarketconditionalontheirexpectationaboutthesecondarymarketStage2:Ticketsupplyanddemandinthesecondarymarketdependontheticketsandpricesoldintheprimarymarket

第34页/共303页TomodelresaleempiricallyCanprimarysellerschangeticketpriceovertime?Canprimarysellersendorseresaleandsharerevenuefromthesecondarymarket?Howwouldprimarysellersadjustprimarypricegivendifferentsettingsofthesecondarymarket?Shallweallowindividualstoendogenouslychoosewhethertoparticipateprimaryorsecondarymarketsduetotransactioncost?Shallwedistinguishbrokersfromrealconsumers?Yes.Shallweallowbuyeruncertainty?Theauthorsallowscheduleconflict,randomparticipation

第35页/共303页ProandConofthispaperCons:Takingprimaryproducersandtheirbehaviorasgiven.CannotanswerhowtheopeningofticketresalemarketaffectsproducersPros:allowbuyersintheprimarymarkettoresellinthesecondarymarketactivities.AllowtheirprimarymarketbuydecisiondependsontheirexpectationofthesecondarymarketdistinguishrealconsumersandbrokersEstimatewelfareeffects

第36页/共303页DataPrimarymarket:TicketMaster,103concertsof18artistsinthesummerof2004Transactionprice,dayoftransaction,section/row/seat/lawn,seatquality(relative,notabsolute)Secondarymarket:allticketssoldoneBayandStubHubinthesummerof2004Transactionprice,dayoflistingandtransaction,section/row/lawnDoesnotcapturethefullsecondarymarket2-5%ticketsresold,39%ofpricemarkupfromticket'sfacevalue,totalresalerevenuecomparableto6%ofticketrevenue.Someticketsareover-sold,someareunder-soldrelativetofacevalueFinervariationbyseatquality

第37页/共303页第38页/共303页第39页/共303页Model–primarymarketBuyersrandomlyarriveattheprimarymarket,choosefromthepoolofunsoldticket,andcannotbuymorethan1ticketConsumerutilityforeventkseatj:BrokerutilityfromtheeventiszeroConsumersandbrokersareforward-looking

第40页/共303页Model–secondarymarketAlltheticketssoldintheprimarymarketisonsaleinthesecondarymarketviaasequenceofprivate-value,second-priceauctionwithlimitedbuyerparticipationOrderofresalegoesfromthehighestqualitytickettothelowestqualityticketBuyerparticipationisrandomandlimitedtoLbiddersineachresaleauction

第41页/共303页SourcesofuncertaintyRandomarrivalofbuyersBuyer'swtpistheirownprivateinfo,andthereisuncertaintyaboutthedistributionofwtp==>BuyersarenotsureabouttheallocationofticketsintheprimarymarketOtherwisebrokerscannotlosemoneyPotentialscheduleconflict,mayberelatedtowtpRandomparticipationinresaleauction

AsimplifyingassumptionMainlytoaccommodatethefactthatpriceisnotamonotonicfunctionofseatqualityeverywhere,thoughtheincreasingrelationshipistrueonaverage第42页/共303页ObjectivefunctionsResaleprice:Broker'sproblemConsumer'sproblem

第43页/共303页EstimationroadmapKeyparametersaretransactioncostsandalltheuncertaintyparametersForanysetofkeyparameters,weneedtomodelforward-lookingbasedontheassumptionofrationalexpectationEstimationhastwoloops:Outerloop:searchforkeyparameterstomatchtheempiricaldata–simulatedGMMInnerloop:findrationalexpectationforforward-lookingagents–fixedpoint

第44页/共303页Estimation–innerloop#1Givenparametersetα,abuyer'sexpectedutilityattheprimarymarketisrepresentedbyfunctionTheinnerloopneedstofindthevalueofαtoreachthefixedpointoftheVfunction

第45页/共303页Estimation–innerloop#2HowtofindafixedpointofV?Givenα0,simulatetheoptimalbehavior→V1RegressV1onvariablesinVfunction→α1RepeatuntilconvergenceonVConvergenceonV:WhereM=#ofbuyers,S=#ofdraws

第46页/共303页Estimation–outerloopIntheouterloopsearchforkeyparametersontransactioncosts,uncertaintyparameters,andeventfixedeffectsSimulatedgeneralizedmethodofmoments(GMM)Total111momentsfor110parameters:Fractionofavailableticketssoldinprimarymktforeachevent(103parameters)Averagefractionresoldbyconsumers(1)Averagefractionresoldbybrokers(1)Averageresaleprice(1)Averagequalityofresoldtickets(1)25thand75thpercentileoftheresalepricedistribution(2)25thand75thpercentileoftheresaleseatqualitydistribution(2)

第47页/共303页Identification110parameters:Eventdummies(103):ticketssoldpereventConsumerpremiumforhighqualitytickets(Φ):price-qualitycurveMeanofaverageconsumerwtp(λ-bar):price-qualitycurve,resalepriceofhigh-qualityticketsStdevofaverageconsumerwtp(σλ):fractionofticketsresoldatalossPrevelenceofbroker(β):fractionofbrokersintheresalemarketConsumertransactioncost(τc):fractionofticketsresoldbyconsumersathighversuslowexpectedmark-upBrokertransactioncost(τb):fractionofticketsresoldbybrokersathighversuslowexpectedmark-upProbabilityofscheduleconflict(ψ):therelativerateatwhichconsumersversusbrokersresellbelowfacevalue

第48页/共303页第49页/共303页第50页/共303页第51页/共303页ConclusionInthecontextofrockconcerts,allowingresaledoesnotresultindramaticwelfareimprovement,butlowertransactioncostswill.Resalemakessomebetteroff(resellingbrokersandconsumers),someworseoff(consumerswhoattendtheevent,slightlylowerrevenueforprimaryproducers)Limitations:Noequilibriumanalysisonproducers,thismayapplytothisdata,butitalsorestrictsthepotentialofapplyingthispaper'sconclusiontootherresalemarketsAlotofrobustnesschecksareneededbeforewebelievetheresults,especiallystructuralassumptionsCanweusemoremomentstoestimatethemodelortestthefitoftheestimation?Noaccountforthetimingofresale(AndrewSweeting2008)

第52页/共303页Theme2:Collusion

CompetitionpatternsPerfectcompetition(firmasprice-taker,homogenousgoods,perfectandcompleteinformation,freeentry)Monopolisticcompetition(firmsareprice-setters,heterogeneousgoods,zero-profitinthelongrun)Bertrand(firmssetprice,homogenousgoods,fixed#offirms)Cournot(firmssetquantity,homogenousgoods,fixed#offirms)Monopoly(collusion)Collusionmakesmoreprofitsbecauseittakesintoaccountthecross-elasticitybetweencompetingfirms第53页/共303页WikiDefinitionofCollusion

Collusionisanagreement,usuallysecretive,whichoccursbetweentwoormorepersonstodeceive,mislead,ordefraudothersoflegalrights,ortoobtainanobjectiveforbiddenbylawtypicallyinvolvingfraudorgaininganunfairadvantageandcaninvolve"wagefixing,kickbacks,ormisrepresentingtheindependenceoftherelationshipbetweenthecolludingparties."[1]Acartelisaformal(explicit)agreementamongfirms.Cartelsusuallyoccurinanoligopolisticindustry,wherethereareasmallnumberofsellersandusuallyinvolvehomogeneousproducts.Cartelmembersmayagreeonsuchmattersaspricefixing,totalindustryoutput,marketshares,allocationofcustomers,allocationofterritories,bidrigging,establishmentofcommonsalesagencies,andthedivisionofprofitsorcombinationofthese.Theaimofsuchcollusionistoincreaseindividualmember'sprofitsbyreducingcompetition.第54页/共303页ShermanAct

CollusionisperseillegalPricefixingBidriggingTerritorialorcustomerallocationamongcompetitorsIdenticalpricedoesnotnecessarilyentailcollusion.Similarly,thefactthatallpricesarenotidenticaldoesnotindicatetheabsenceofcollusionAntitrustevidence(/usao/eousa/foia_reading_room/usam/title7/ant00008.htm)ExplicitagreementamongcompetitorsRecordsofchangesorpricesCompetitors’meetings,phoneconversationTestimonyfromacartelmember第55页/共303页CollusionStability

Collusionisinherentlyunstablebecauseeachmemberhasincentivetodeviateandsecretlyundercutthepriceorexpandproduction.Detectionofviolatorsmaybetoughifthereareunpredictablerandomfactorsindemandandsupply.Evenworseifthefactorsarenotperfectlyobservabletoothercartelmembers.Cartelstabilityisalsosubjecttopotentialentriesbecausecartelmakesmorethannormalprofits.第56页/共303页Empiricaldifficulty

indetectingcollusion

Multipleequilibriabyfolktheorem:manypayoffsbetweenperfectcompetitionandmonopolycanbesupportedbycartelDemandandsupplyshiftersmaybeunobservabletoeconometricians,butobservabletocartelNeedtoaccommodateentriesandpotentialstrategicelementsinentrydeterrenceIfthetheoryworks,wewillneverobservedeviationfromthecollusiveequilibrium.Collusiveequilibriumdependsonbeliefsofhowcompetitorsbehaveinoff-equilibriumpaths,whicheconometricianscannotobserveLackofbenchmarkpricedistributionthatreflectsnon-collusion第57页/共303页LiteratureonConductParameter

TimBresnahan“Empiricalstudiesofindustrieswithmarketpower”,inSchmalanseeandWilligeditedTheHandbookofIndustrialOrganization,volII,1989KenCorts“Conductparametersandthemeasurementofmarketpower”JournalofEconometrics1999第58页/共303页LiteratureonConductParameter

ConjecturalvariationmodelextendstheclassicalBertrandandCournot:firmsmayholdnon-zeroconjecturesabouttheirrivals’responsestochangesintheirstrategiesFirmiexpectsrivals’aggregateoutputisRi(qi).Defineri=R’i(qi)Firmi’sfirstorderconditionis:(definessupplyfunc.)Conductparameter第59页/共303页LiteratureonConductParameter

Conductparameter:0correspondstoperfectcompetition1correspondstoclassicalCournotNcorrespondstocollusionConductparameterLernerIndexIndustrydemandelasticity第60页/共303页CriticismonConductParameter

NocoherenttheoryforbehaviorsbeyondthethreeextremesEvennotgoodattestingthethreeextremesbecausetheta=1couldbeconsistentwithanylevelofmarketpowerwhendemandisiidIntheory,conductparametermeasureshowthecompetitorsrespondtoachangeoffirmi’sstrategy.Inreality,itmeasureshowequilibriumoutputvarieswithshiftsinexogenousvariables.Thesetwoaren’tthesame,notevenasymptotically.Corts(1999)showsthatthemismeasurementoftheconductparametercouldbequitesevere.第61页/共303页CriticismonConductParameter

NocoherenttheoryforbehaviorsbeyondthethreeextremesEvennotgoodattestingthethreeextremesbecausetheta=1couldbeconsistentwithanylevelofmarketpowerwhendemandisiidIntheory,conductparametermeasureshowthecompetitorsrespondtoachangeoffirmi’sstrategy.Inreality,itmeasureshowequilibriumoutputvarieswithshiftsinexogenousvariables.Thesetwoaren’tthesame,notevenasymptotically.Corts(1999)showsthatthemismeasurementoftheconductparametercouldbequitesevere.第62页/共303页PorterBELL1983

RQ:Isthegrainpricefluctuationduring1880-1886attributabletocollusivebehavioroftheJointExecutiveCommittee,orsomethingelse?Whyinteresting?Alotoftheories,littleempiricalevidenceProvidemoreinsightsforantitrustefforts?Data:p,qovertime第63页/共303页PorterBELL1983--theory

Collusionwithimperfectdetection:pricemaydecline(thusqmayincrease)duetodemanduncertaintyorsecretpricecutCollusionissupportedbyswitchingtoamorecompetitivemarketsupplyifthepriceistooloworthetotalquantitysuppliedistoohighGivenuncertaindemand,theoptimalchoiceofdetectingmechanismdoesnotsupportthemonopolyprice.Infact,thecollusiveequ.haslargerquantityandlowerpricethanperfectcollusion(tradeoffshort-runprofitswithlong-runstability)GreenandPorter1984showshowtouseCournotasapunishmenttosupportperfectcollusion.Thisisnottheexactmodelthispapertests,butitmotivatestheeconometricsstructure.Detectfluctuationwithinthecollusiveequ,noton/offequ.第64页/共303页PorterBELL1983--Model

Demand:Supply:(supplysidebasedonconductparameter)θ=0forBertrand;HerfindahlforCournot,1forcollusionIdentification:useentryandregimeshiftsassupplyshiftertoidentifydemanduselakeseasonsasdemandshiftertoidentifysupplyregimeshiftsareunobservable!AssumingIitconformsiidBernoulli(0/1),useE-MalgorithmtoidentifyIit第65页/共303页PorterBELL1983--assumptions

Q:Lakeseasonispredictable,butthetheoryemphasizesunpredictablefactors.Contradiction?Lakedummyhelpsidentifythesupplycurve,butwhattriggerstheregimeshiftistheunobservableandunpredictablepartoftheerrortermU_1t.Keyassumptions:Assumeawaytheactiveroleofentryandexit,andthereforeentryonlyshiftsthesupplycurvebyaconstantAssumeindependentdrawsofregimeshiftingratherthanpathdependent.Claimsthatthiswouldnotgeneratetoomuchbiasifthenumberofreversionaryepisodesissmallrelativetothesamplesize Errortermsarenormal第66页/共303页PorterBELL1983–keyidentif