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The Economics of Industrial Organization

Fifth Edition

William G. Shepherd and Joanna M. Shepherd

The study of industrial organization extends to the core of some of the most important questions of economics: Who controls markets and profits from them? Does competition or monopoly result in a more beneficial economy? How can the economic playing field become fairer or more biased in either direction? Throughout the field’s history, various clashing schools of thought have attempted to sort through these complex issues, examining both abstract theory and real-life cases. The Fifth Edition of this widely used, highly regarded text includes coverage of dramatic changes in the field. Shepherd and Shepherd provide broad, balanced coverage of topics without showing preference to any single point of view, encouraging readers to think independently. This emphasis on independent judgment is evident throughout the book, with discussion of structure placed before performance to assist the reader in thinking about causation. Topics are organized for maximum flexibility, with distinct chapters covering case studies, antitrust and regulation policy, and capital markets.
 

$52.95 list, 426 pages

10-digit ISBN: 1-57766-278-4

13-digit ISBN: 978-1-57766-278-5

© 2004

Instructor’s Manual available

Table of Contents

Part I. BASIC CONCEPTS

1. Basic Concepts and Debates

Concepts and Trends / Real-world Markets and Trends / Competition’s Nature and Paradoxes / The Field Evolves / The Sequence of Topics

2. Theories of Competition and Monopoly

Performance Values / Competition and Performance / Effects of Monopoly Power / Appendix: Topics, Methods, and Sources for Student Research Papers

Part II. MARKET STRUCTURE

3. Market Definition, Market Imperfections, and Degrees of Competition

Defining the Market / Market Imperfections / The Elements of Market Structure / Degrees and Concepts of Partial Competition / Degrees of Competition in Real Markets

Part III. PERFORMANCE

4. Market Power’s Effects on Prices, Profits, and Efficiency

Effects on Prices and Profits / Effects on Efficiency

5. Innovation, Fairness, and Other Value

Innovation / Empirical Analysis of R & D and Innovation / Fairness / Competition Itself: Benefits and Costs / Other Values

Part IV. DETERMINANTS OF MARKET STRUCTURE

6. Capital Markets, Mergers, and Other Influences on Structure

Capital Markets / Mergers / Other Determinants of Structure

7. Economies and Diseconomies of Scale

Historical Shifts in Technology Trends / Basic Concepts / Plant-Level Economies and Diseconomies / Multiplant Economies and Diseconomies / Methods of Research / Empirical Findings

Part V. BEHAVIOR AND RELATED TOPICS

 8. The Firm: Concepts and Conditions

Concepts of the Firm / Motivation / Real Firms

9. Monopoly, Dominance, and Entry

Leading Cases and Trends of Dominance / Sources and Sustaining Factors of Monopoly and Dominance / Models of Dominant Firms / Concepts of Entry and Limit Pricing / Firms’ Choices in Light of Potential Entry / The Special Case of Ultrafree Entry (Contestability)

10. Price Discrimination and Predatory Actions

The Nature of Price Discrimination / Price Discrimination’s Effects / “Predatory” Actions, Including Pricing / Cases of Price Discrimination

11. Tight Oligopoly: Theories and Real-world Patterns

Conflicting Incentives: Cooperation Versus Cheating / Basic Theories of Interdependence / Game Theory: Models of Noncollusive Duopoly / Tacit Collusion and Price Leadership / Conditions Favoring or Discouraging Collusion / Collusion in Real Markets / Types of Collusion

12. Vertical Conditions, Size and Diversification, and Advertising

Monopsony and Bilateral Monopoly / Vertical Integration / Vertical Market Power and Restrictions / The Effects of Bigness / Diversification / Product Differentiation, Especially Advertising

Part VI. INDUSTRY CASE STUDIES

 13. Case Studies of Dominant Firms

Microsoft / Newspapers in Local Markets / Local Telephone-Service Markets (The Baby Bells) / Mainframe Computers (IBM) / Beer (Anheuser-Busch) / Electricity / Capsule Studies

14. Case Studies of Tight Oligopolies

Passenger Aircraft (Boeing and Airbus) / Airlines / Sports / Breakfast Cereals / Trash Removal

Part VII. PUBLIC POLICIES TOWARD MONOPOLY

 15. Antitrust Policies: Standards and Methods

Origins and Standards of U.S. Antitrust and Regulation Policies / U.S. Antitrust Policies: Forms and Coverage / Antitrust in Other Countries

16. Antitrust Applied toward Dominance, Mergers, and Conduct

Toward Existing Dominance: Section 2 Cases / Toward Mergers / Toward Price Fixing and Other Actions / Policy Imbalance?

17. Regulation, Deregulation, Public Enterprise, and Privatization

Regulation of Natural Monopoly / Partial Deregulation and Price Caps / Full Deregulation / Public Enterprise / The Privatization of Public Firms

18. Further Study