Working Paper: NBER ID: w14117
Authors: Ariel Pakes
Abstract: This paper reviews recent methodological developments in the empirical analysis of imperfectly competitive markets highlighting outstanding problems. Some of these problems are econometric; e.g. the need for a deeper understanding of the small sample properties of our estimators. Most of the other problems relate to issues which have been a central part of ongoing research programs in economic theory for some time. We consider ways in which applied work can cope with these problems and, in so doing, also inform theory. The use of estimators based on moment inequalities opens up several possibilities in this regard and a detailed discussion of the assumptions used to rationalize these estimators is provided. An example, the analysis of contracts in buyer-seller networks, is used to highlight these points.
Keywords: imperfect competition; econometric methods; market analysis; buyer-seller networks; moment inequalities
JEL Codes: C01; C5; C73; L0; L1; L4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Methodological developments in empirical analysis (C50) | Enhanced theoretical understanding (D84) |
| Assumptions underlying different estimators based on moment inequalities (C51) | Impact on analysis of contracts in buyer-seller networks (L14) |