Industrial organization

{{Short description|Field that examines the structure of firms and markets}}

{{About|the field of economics|the field of psychology|Industrial and organizational psychology}}

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In economics, industrial organization is a field that builds on the theory of the firm by examining the structure of (and, therefore, the boundaries between) firms and markets. Industrial organization adds real-world complications to the perfectly competitive model, complications such as transaction costs,• R. H. Coase, 1937. "The Nature of the Firm", Economica, N.S., 4(16), pp. [https://web.archive.org/web/20120113105151/http://www.sonoma.edu/users/e/eyler/426/coase1.pdf 386–405].
 • _____, 1988. "The Nature of the Firm: Influence", Journal of Law, Economics, & Organization, 4(1), pp. [https://www.jstor.org/pss/765013 33]–47. Reprinted in The Nature of the Firm: Origins, Evolution, and Development, 1993, O. E. Williamson and S, G. Winter, ed., pp. [https://books.google.com/books?id=VXIDgGjLHVgC&pg=PA61 61–74].
 • _____, 1991. "[https://www.nobelprize.org/nobel_prizes/economics/laureates/1991/coase-lecture.html The Institutional Structure of Production]", Nobel Lecture, reprinted in 1992, American Economic Review, 82(4), pp. [https://www.jstor.org/pss/2117340 713]–719.
 • Oliver E. Williamson, 1981. "The Economics of Organization: The Transaction Cost Approach", American Journal of Sociology, 87(3), pp. [https://web.archive.org/web/20141018232235/http://glenn.osu.edu/faculty/brown/home/Org%20Theory/Readings/Williamson1981.pdf 548–577].
 • _____, 2009. "[http://nobelprize.org/nobel_prizes/economics/laureates/2009/williamson_lecture.pdf Transaction Cost Economics: The Natural Progression]", Nobel Lecture. Reprinted in 2010, American Economic Review, 100(3), pp. 673–90. limited information, and barriers to entry of new firms that may be associated with imperfect competition. It analyzes determinants of firm and market organization and behavior on a continuum between competitionGeorge J. Stigler, [1987] 2008. "competition", The New Palgrave Dictionary of Economics, 2nd Edition. [http://www.dictionaryofeconomics.com/article?id=pde2008_C000261&edition= Abstract.] and monopoly,• Luigi Zingales, 2008. "corporate governance", The New Palgrave Dictionary of Economics, 2nd Edition. [http://www.dictionaryofeconomics.com/article?id=pde2008_C000370&edition=current&q=governance%20&topicid=&result_number=1 Abstract.]
 • Oliver E. Williamson, 2002. "The Theory of the Firm as Governance Structure: From Choice to Contract", Journal of Economic Perspectives, 16(3), pp. [http://pubs.aeaweb.org/doi/pdfplus/10.1257/089533002760278776 171–195.]
 • Frederic M. Scherer and David Ross, 1990. Industrial Market Structure and Economic Performance, 3rd ed. [https://ssrn.com/abstract=1496716 Description] and 1st ed. review [https://www.jstor.org/pss/3003013 extract].
  • Dennis W. Carlton and Jeffrey M. Perloff, 2004. Modern Industrial Organization, 4th edition, pp. 2–3. [http://www.lavoisier.fr/notice/frSWORK23A3RW32O.html Description.] including from government actions.

There are different approaches to the subject. One approach is descriptive in providing an overview of industrial organization, such as measures of competition and the size-concentration of firms in an industry. A second approach uses microeconomic models to explain internal firm organization and market strategy, which includes internal research and development along with issues of internal reorganization and renewal.• Frederic M. Scherer and David Ross, 1990. Industrial Market Structure and Economic Performance, 3rd ed. [https://ssrn.com/abstract=1496716 Description] and 1st ed. review [https://www.jstor.org/pss/3003013 extract].
 • Dennis W. Carlton and Jeffery M. Perloff, 2004. "Modern Industrial Organization, Overview", ch. 5, Handbook of Industrial Organization, Elsevier, v. 1, pp. 259–327. {{Cite book | doi=10.1016/S1573-448X(89)01008-3| chapter=Chapter 5 Noncooperative game theory for industrial organization: An introduction and overview| title=Handbook of Industrial Organization Volume 1| volume=1| pages=259–327| year=1989| last1=Fudenberg| first1=Drew| last2=Tirole| first2=Jean| isbn=9780444704344| s2cid=154265880}}
 • Carl Shapiro, 1989. "The Theory of Business Strategy", RAND Journal of Economics, 20(1), pp. [https://www.jstor.org/pss/2555656 125]–137.
 • Kyle Bagwell and Asher Wolinsky (2002). "Game theory and Industrial Organization", ch. 49, Handbook of Game Theory with Economic Applications, v. 3, pp. 1851–1895 {{Cite book | doi=10.1016/S1574-0005(02)03012-6| chapter=Chapter 49 Game theory and industrial organization| title=Handbook of Game Theory with Economic Applications Volume 3| volume=3| pages=1851–1895| year=2002| last1=Bagwell| first1=Kyle| last2=Wolinsky| first2=Asher| isbn=9780444894281}}
 • Martin Shubik, 1987. A Game-Theoretic Approach to Political Economy, Part II. MIT Press. [http://mitpress.mit.edu/catalog/item/default.asp?tid=5086&ttype=2 Description]. {{webarchive |url=https://web.archive.org/web/20110503182202/https://ssrn.com/abstract=1496716 |date=May 3, 2011 }} A third aspect is oriented to public policy related to economic regulation,Richard Schmalensee and Robert Willig, eds., 1989. Handbook of Industrial Organization, Elsevier, v. 2, Part 5, Government Intervention in the Marketplace, ch. 22–26, abstract [http://www.sciencedirect.com/science/handbooks/1573448X/2 links.] antitrust law,• Richard A. Posner, 2001. Antitrust Law, 2nd ed. University of Chicago Press. [https://books.google.com/books?id=vV3i8XCzc8cC&dq==false&pg=PR5 Preview.]
 • D. L. Rubinfeld, 2001. "Antitrust Policy", International Encyclopedia of the Social & Behavioral Sciences, pp. 553–560.

{{Cite book |url=https://books.google.com/books?id=vV3i8XCzc8cC&q=%3Dfalse&pg=PR5 |title=Antitrust Law, Second Edition |access-date=April 10, 2017 |archive-url=https://web.archive.org/web/20170107191058/https://books.google.com/books?hl=en&lr=&id=vV3i8XCzc8cC&oi=fnd&pg=PR5&dq==false |archive-date=January 7, 2017 |url-status=bot: unknown |isbn=9780226675787 |last1=Posner |first1=Richard A. |date=2009-04-22 |publisher=University of Chicago Press }} and, more generally, the economic governance of law in defining property rights, enforcing contracts, and providing organizational infrastructure.• Avinash K. Dixit, 2008. "economic governance", The New Palgrave Dictionary of Economics, 2nd Edition. [http://www.dictionaryofeconomics.com/article?id=pde2008_E000260&edition=current&q= Abstract.]
 • Oliver E. Williamson, 1996. The Mechanisms of Governance, "Prologue", pp. [https://books.google.com/books?id=meERBVysP6YC&pg=PA3 3]–20.• George J. Stigler, 1983. The Organization of Industry, University of Chicago Press. Description and contents [https://archive.today/20111107161440/http://www.press.uchicago.edu/presssite/metadata.epl?isbn=9780226774329 links] and [https://books.google.com/books?id=j6SOJv8OeHAC&pg=PA1=GBS_ATB preview.]
 • Richard Schmalensee, 1988. "Industrial Economics: An Overview", Economic Journal, 98(392), pp. [https://www.jstor.org/pss/2233907 643]–681. Working paper [http://dspace.mit.edu/bitstream/handle/1721.1/48172/industrialeconom00schm.pdf?s. link].
 • Handbook of Industrial Organization, Elsevier:

:Richard Schmalensee and Robert Willig, ed., 1989. v. 1. Links to [http://www.elsevier.com/wps/find/bookdescription.cws_home/601119/description#description description & contents] {{Webarchive|url=https://web.archive.org/web/20121002032608/http://www.elsevier.com/wps/find/bookdescription.cws_home/601119/description#description |date=2012-10-02 }} & (partial) chapter [http://www.sciencedirect.com/science/handbooks/1573448X/1 outlines.]

: _____, ed., 1989. v. 2. Links to [http://www.elsevier.com/wps/find/bookdescription.cws_home/601120/description#description description & contents] {{Webarchive|url=https://web.archive.org/web/20121002032632/http://www.elsevier.com/wps/find/bookdescription.cws_home/601120/description#description |date=2012-10-02 }} and chapter [http://www.sciencedirect.com/science/handbooks/1573448X/2 outlines.]

:Mark Armstrong and Robert Porter, ed., 2007. v. 3. Links to [https://books.google.com/books?id=bvrn72h8dDwC description], chapter-content [http://www.elsevier.com/wps/find/bookdescription.cws_home/601121/description#description descriptions] {{Webarchive|url=https://web.archive.org/web/20121002032713/http://www.elsevier.com/wps/find/bookdescription.cws_home/601121/description#description |date=2012-10-02 }}

The extensive use of game theory in industrial economics has led to the export of this tool to other branches of microeconomics, such as behavioral economics and corporate finance. Industrial organization has also had significant practical impacts on antitrust law and competition policy.Exemplified in such advanced textbooks as Jean Tirole, 1988, The Theory of Industrial Organization, MIT Press, [https://archive.org/details/theoryofindustri00jean description] and chapter-preview [https://archive.org/details/theoryofindustri00jean links.]

The development of industrial organization as a separate field owes much to Edward Chamberlin,• Edward Hastings Chamberlin, 1933. The Theory of Monopolistic Competition: A Re-orientation of the Theory of Value, 1965, 8th ed. Harvard University Press.
 • R. Rothschild, 1987. "The Theory of Monopolistic Competition: E.H. Chamberlin's Influence on Industrial Organisation Theory over Sixty Years", Journal of Economic Studies, 14(1), pp. 34–54. [http://www.emeraldinsight.com/journals.htm?articleid=1709405 Abstract].
 • William L. Baldwin, 2007. "Edward Hastings Chamberlin", in Pioneers of Industrial Organization, H. W. de Jong, W. G. Shepherd, ed., pp. [https://books.google.com/books?id=TpfrPPOFWUIC&pg=PA199=FALSE 199–]. Joan Robinson, Edward S. Mason,Edward S. Mason, 1939. "Price and Production Policies of Large-Scale Enterprise", American Economic Review, 29(1, Supplement), pp. [https://www.jstor.org/pss/1806955 61]–74.
 • _____, 1949. "The Current Status of the Monopoly Problem in the United States", Harvard Law Review, 62(8), pp. [https://www.jstor.org/pss/1336466 1265]–1285.
 • _____, 1957. Economic Concentration and the Monopoly Problem, Harvard University Press. Review [https://www.jstor.org/pss/1234950 extract].
 • William G. Shepherd, 2007. "Edward S. Mason", in Pioneers of Industrial Organization, H. W. de Jong, W. G. Shepherd, ed. J. M. Clark,J.M. Clark, 1940. [https://www.jstor.org/pss/1807048 Toward a Concept of Workable Competition]. American Economic Review, Vol. 30, No. 2, Part 1, Jun., pp. 241–256

 • William L. Baldwin, 2007. "John Maurice Clark" in Pioneers of Industrial Organization, H. W. de Jong, W. G. Shepherd, ed., pp. [https://books.google.com/books?id=TpfrPPOFWUIC&pg=PA183 183–186]. Joe S. Bain• Joe S. Bain, 1956. Barriers to New Competition: Their Character and Consequences in Manufacturing, Harvard University Press. Review extracts [https://www.jstor.org/discover/10.2307/1811245?uid=3739936&uid=2&uid=4&uid=3739256&sid=21101828169287][https://www.jstor.org/discover/10.2307/2097589?uid=3739936&uid=2&uid=4&uid=3739256&sid=21101828169287].
 • _____, 1959, 2nd ed., 1968. Industrial Organization: A Treatise, John Wiley.
 • Richard E. Caves, 2007. "Joe S. Bain", in Pioneers of Industrial Organization, H. W. de Jong, W. G. Shepherd, ed., pp. [https://books.google.com/books?id=TpfrPPOFWUIC&pg=PA224 224–231]. and Paolo Sylos Labini, among others.E. T. Grether, 1970. "Industrial Organization: Past History and Future Problems", American Economic Review, 60(2), pp. [https://www.jstor.org/pss/1815790 83]–89.Oliver E. Williamson, ed., 1990. Industrial Organization, Edward Elgar. [http://www.e-elgar.co.uk/Bookentry_DESCRIPTION.lasso?id=593 Description] {{Webarchive|url=https://web.archive.org/web/20110722004854/http://www.e-elgar.co.uk/Bookentry_DESCRIPTION.lasso?id=593 |date=2011-07-22 }} and article [http://www.e-elgar.co.uk/Bookentry_contents.lasso?id=593 list.] {{Webarchive|url=https://web.archive.org/web/20141024124906/http://www.e-elgar.co.uk/Bookentry_contents.lasso?id=593 |date=2014-10-24 }}23 articles, dating from 1937 to 1987.