New Perspectives on Industrial Organization: With Contributions from Behavioral Economics and Game Theory (Springer Texts in Business and Economics)

This book covers the main topics that students need to learn in a course on Industrial Organization. It reviews the classic models and important empirical evidence related to the field. However, it will differ from prior textbooks in two ways. First, this book incorporates contributions from behavioral economics and neuroeconomics, providing the reader with a richer understanding of consumer preferences and the motivation for many of the business practices we see today. The book discusses how firms exploit consumers who are prone to making mistakes and who suffer from cognitive dissonance, attention lapses, and bounded rationality, for example and will help explain why firms invest in persuasive advertising, offer 30-day free trials, offer money-back guarantees, and engage in other observed phenomena that cannot be explained by the traditional approaches to industrial organization. A second difference is that this book achieves a balance between textbooks that emphasize formal modeling and those that emphasize the history of the field, empirical evidence, case studies, and policy analysis. This text puts more emphasis on the micro-foundations (i.e., consumer and producer theory), classic game theoretic models, and recent contributions from behavioral economics that are pertinent to industrial organization. Each topic will begin with a discussion of relevant theory and models and will also include a discussion of concrete examples, empirical evidence, and evidence from case studies. This will provide students with a deeper understanding of firm and consumer behavior, of the factors that influence market structure and economic performance, and of policy issues involving imperfectly competitive markets. The book is intended to be a textbook for graduate students, MBAs and upper-level undergraduates and will use examples, graphical analysis, algebra, and simple calculus to explain important ideas and theories in industrial organization. -- This book covers the main topics that students need to learn in a course on Industrial Organization. It reviews the classic models and important empirical evidence related to the field. However, it will differ from prior textbooks in two ways. First, this book incorporates contributions from behavioral economics and neuroeconomics, providing the reader with a richer understanding of consumer preferences and the motivation for many of the business practices we see today. The book discusses how firms exploit consumers who are prone to making mistakes and who suffer from cognitive dissonance, attention lapses, and bounded rationality, for example and will help explain why firms invest in persuasive advertising, offer 30-day free trials, offer money-back guarantees, and engage in other observed phenomena that cannot be explained by the traditional approaches to industrial organization. -- A second difference is that this book achieves a balance between textbooks that emphasize formal modeling and those that emphasize the history of the field, empirical evidence, case studies, and policy analysis. This text puts more emphasis on the micro-foundations (i.e., consumer and producer theory), classic game theoretic models, and recent contributions from behavioral economics that are pertinent to industrial organization. Each topic will begin with a discussion of relevant theory and models and will also include a discussion of concrete examples, empirical evidence, and evidence from case studies. This will provide students with a deeper understanding of firm and consumer behavior, of the factors that influence market structure and economic performance, and of policy issues involving imperfectly competitive markets. The book is intended to be a textbook for graduate students, MBAs and upper-level undergraduates and will use examples, graphical analysis, algebra, and simple calculus to explain important ideas and theories in industrial organization Front Matter....Pages i-xxvi Front Matter....Pages 1-1 Introduction....Pages 3-23 Demand, Technology, and the Theory of the Firm....Pages 25-54 Introductory Game Theory and Economic Information....Pages 55-100 Behavioral Economics....Pages 101-119 Front Matter....Pages 121-121 Perfect Competition and Market Imperfections....Pages 123-143 Monopoly and Monopolistic Competition....Pages 145-162 Product Differentiation....Pages 163-175 Market Structure, Industry Concentration, and Barriers to Entry....Pages 177-210 Front Matter....Pages 211-211 Cartels....Pages 213-239 Quantity and Price Competition in Static Oligopoly Models....Pages 241-282 Dynamic Monopoly and Oligopoly Models....Pages 283-310 Market Power....Pages 311-340 Front Matter....Pages 341-341 Product Design, Multiproduct Production, and Brand Proliferation....Pages 343-377 Price Discrimination and Other Marketing Strategies....Pages 379-421 Advertising....Pages 423-466 Advertising and Welfare....Pages 467-484 Technological Change, Dynamic Efficiency, and Market Structure....Pages 485-519 Horizontal, Vertical, and Conglomerate Mergers....Pages 521-566 Front Matter....Pages 567-567 Efficiency, Equity, and Corporate Responsibility in Imperfect Competition....Pages 569-585 Antitrust Law and Regulation....Pages 587-646 Front Matter....Pages 567-567 Industry and Firm Studies....Pages 647-667 Back Matter....Pages 669-811 This textbook incorporates contributions from behavioral economics and neuroeconomics, providing a deeper understanding of consumer preferences and the motivation for many current business practices