Empirical Models of Industry Dynamics with Endogenous Market Structure

Annual Review of Economics, Forthcoming

Posted: 16 Oct 2020

See all articles by Steven Berry

Steven Berry

Yale University - Department of Economics; National Bureau of Economic Research (NBER); Yale University - Cowles Foundation

Giovanni Compiani

University of Chicago Booth School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: August 15, 2020

Abstract

This article reviews recent developments in the study of industry dynamics, with a special emphasis on the econometric endogeneity of market structure. Endogeneity of market structure follows from the presence of serially correlated unobservable shocks to the profitability of firms’ dynamic decisions, a feature common to many empirical settings. We particularly focus on extensions of standard two-step methods that leverage instrumental variables to address endogeneity, in both single-agent and oligopoly models.

Suggested Citation

Berry, Steven T. and Compiani, Giovanni, Empirical Models of Industry Dynamics with Endogenous Market Structure (August 15, 2020). Annual Review of Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3681743 or http://dx.doi.org/10.2139/ssrn.3681743

Steven T. Berry

Yale University - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Yale University - Cowles Foundation

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Giovanni Compiani (Contact Author)

University of Chicago Booth School of Business ( email )

Chicago, IL
United States

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