Industrial Organization

As a field of applied microeconomics, Industrial Organization studies the strategic behavior of firms and the structure of markets, moving beyond the theoretical extremes of perfect competition and pure monopoly. It analyzes how firms in real-world industries, particularly oligopolies, make decisions regarding pricing, advertising, innovation, and mergers. A central focus is the concept of market power—how it is obtained, exercised, and its impact on economic efficiency and consumer welfare—which naturally leads to the study of government intervention through antitrust policy and regulation designed to promote competition.

1. Introduction to Industrial Organization
   1. Defining Industrial Organization
      1. Core Concepts and Scope
      2. Historical Development of IO
      3. Key Questions in IO
   2. Methods and Approaches in IO
      1. Empirical Approaches
      2. Theoretical Approaches
      3. Case Study Methods
      4. Policy Analysis Role
   3. Relationship to Economic Theory
      1. Connection to Microeconomic Theory
      2. Differences from Traditional Microeconomics
      3. Overlap with Labor Economics
      4. Overlap with Public Economics
   4. The Structure-Conduct-Performance Paradigm
      1. Market Structure Components
         1. Number of Firms
         2. Size Distribution of Firms
         3. Entry Conditions
         4. Exit Conditions
         5. Product Differentiation
         6. Vertical Integration
      2. Firm Conduct Elements
         1. Pricing Behavior
         2. Product Strategy
         3. Advertising Strategy
         4. Research and Development
         5. Collusion and Cooperation
      3. Market Performance Measures
         1. Allocative Efficiency
         2. Productive Efficiency
         3. Innovation and Technological Progress
         4. Consumer Surplus
         5. Producer Surplus
      4. Criticisms of the SCP Paradigm
         1. Endogeneity Problems
         2. Structure and Conduct Interdependence
         3. Empirical Limitations
      5. Evolution Beyond SCP
         1. Transition to New IO Approaches
   5. The New Industrial Organization
      1. Game Theory Applications
         1. Strategic Interaction Modeling
         2. Firm Behavior Analysis
      2. Econometric Approaches
         1. Structural Estimation Methods
         2. Identification Strategies