My spring 2020 Industrial Organization reading list and syllabus

It is long, do note that many topics are covered in the other half of the class, I tried to put this beneath the fold, but today WordPress software is not cooperating…

  1. Productivity

American Economic Review Symposium, May 2010, starts with “Why do Firms in Developing Countries Have Low Productivity?” runs pp.620-633.

Nicholas Bloom, Raffaella Sadun, and John Van Reenen, “Recent Advances in the Empirics of Organizational Economics,”

Serguey Braguinsky, Lee G. Branstetter, and Andre Regateiro,The Incredible Shrinking Portuguese Firm,” 

Bloom, Nicholas, Raffaella Sadun, and John Van Reenen. “Management as a Technology?” National Bureau of Economic Research working paper 22327, June 2016.

David Lagakos, “Explaining Cross-Country Productivity Differences in Retail Trade,” Journal of Political Economy, April 2016, 124, 2, 1-49.

Dani Rodrik, “A Surprising Convergence Result,”, and his paper here

Tyler Cowen, The Complacent Class, chapter four, “Why Americans Stopped Creating,” 2017.

Ufuk Akcigit and Sina T. Ates, “Ten Facts on Declining Business Dynamism and Lessons from Endogenous Growth Theory,” NBER working paper 25755, April 2019.

Syerson, Chad “What Determines Productivity?” Journal of Economic Literature, June 2011, XLIX, 2, 326-365. 

Michael Kremer, “The O-Ring Theory of Economic Development,” Quarterly Journal of Economics, August 1993, 108, 3, 551-575.

Song, Jae, David J. Price, Fatih Guvenen, and Nicholas Bloom. “Firming Up Inequality,” Federal Reserve Bank of Minneapolis working paper 750, April 2018.  Do not bother with the very long appendix.

Nicholas Bloom, Raffaella Sadun, and John Van Reenen, the slides for “Americans do I.T. Better: US Multinationals and the Productivity Miracle,”, the paper is here but I recommend focusing on the slides. 

Tyler Cowen and Ben Southwood, “Is the rate of scientific progress slowing down?”, 

Patrick Collison and Michael Nielsen, “Science is Getting Less Bang for its Buck,” Atlantic, November 16, 2018, 

Decker, Ryan and John Haltiwanger, Ron S. Jarmin, and Javier Miranda. “Where Has all the Skewness Gone?  The Decline in High-Growth (Young) Firms in the U.S. National Bureau of Economic Research working paper 21776, December 2015.

Furman, Jason and Peter Orszag. “A Firm-Level Perspective on the Role of Rents in the Rise in Inequality.” October 16, 2015.


2. Competition and monopoly

Bresnahan, Timothy F. “Competition and Collusion in the American Automobile Industry: the 1955 Price War,” Journal of Industrial Economics, 1987, 35(4), 457-82.

Asker, John, “A Study of the Internal Organization of a Bidding Cartel,” American Economic Review, (June 2010), 724-762.

Tim Sablik and Nicholas Trachter, “Are Markets Becoming Less Competitive?” Economic Brief, Federal Reserve Bank of Richmond, June 2019.

Susanto Basu, “Are Price-Cost Markups Rising in the United States? A Discussion of the Evidence,” Journal of Economic Perspectives, Summer 2019, 33, 3, 3-22.

Esteban Rossi-Hansberg, Pierre-Daniel Sarte, and Nicholas Trachter, “Diverging Trends in National and Local Concentration,” NBER Working Paper 25066, Septemmber 2018.

David Autor, David Dorn, Lawrence Katz, Christina Patterson, John Van Reenen, “The Fall of the Labor Share and the Rise of Superstar Firms,”, make sure you get the Oct. 2019 version, not the earlier NBER paper.

Whinston, Michael D., “Antitrust Policy Toward Horizontal Mergers,” Handbook of Industrial Organization, vol.III, chapter 36, see also chapter 35 by John Sutton.

Jan De Loecker and Jan Eeckhout, “The Rise of Market Power and its Macroeconomic Implications,”  My comment on it is here: and see also me on intangible capital,

Chang-Tai Hsieh and Esteban Rossi-Hansberg, “The Industrial Revolution in Services, September 20, 2019, on-line.

Klein, Benjamin and Leffler, Keith. “The Role of Market Forces in Assuring Contractual Performance.”  Journal of Political Economy 89 (1981): 615-641.

Breit, William. “Resale Price Maintenance: What do Economists Know and When Did They Know It?” Journal of Institutional and Theoretical Economics (1991).

Bogdan Genchev, and Julie Holland Mortimer. “Empirical Evidence on Conditional Pricing Practices.” NBER working paper 22313, June 2016.

Sproul, Michael.  “Antitrust and Prices.”  Journal of Political Economy (August 1993): 741-754.

McCutcheon, Barbara. “Do Meetings in Smoke-Filled Rooms Facilitate Collusion?”  Journal of Political Economy (April 1997): 336-350.

Crandall, Robert and Winston, Clifford, “Does Antitrust Improve Consumer Welfare?: Assessing the Evidence,”  Journal of Economic Perspectives (Fall 2003), 3-26, available at

FTC, Bureau of Competition, website,, an optional browse, perhaps read about some current cases and also read the merger guidelines.

Parente, Stephen L. and Prescott, Edward. “Monopoly Rights: A Barrier to Riches.”  American Economic Review 89, 5 (December 1999): 1216-1233.

Demsetz, Harold.  “Why Regulate Utilities?”  Journal of Law and Economics (April 1968): 347-359.

Armstrong, Mark and Sappington, David, “Recent Developments in the Theory of Regulation,” Handbook of Industrial Organization, chapter 27, also on-line.

Shleifer, Andrei. “State vs. Private Ownership.” Journal of Economic Perspectives (Fall 1998): 133-151.

Xavier Gabaix and David Laibson, “Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets,”

Strictly optional, most of you shouldn’t read this: Ariel Pakes and dynamic computational approaches to modeling oligopoly:


III. Economics of Tech


Farrell, Joseph and Klemperer, Paul, “Coordination and Lock-In: Competition with Switching Costs and Network Effects,” Handbook of Industrial Organization, vol.III, chapter 31, also on-line.

Weyl, E. Glenn. “A Price Theory of Multi-Sided Platforms.” American Economic Review, September 2010, 100, 4, 1642-1672.

Gompers, Paul and Lerner, Josh. “The Venture Capital Revolution.” Journal of Economic Perspectives (Spring 2001): 145-168.

Paul Graham, essays,, to browse as you find useful or not.

Acemoglu, Daron and Autor, David, “Skills, Tasks, and Technologies: Implications for Employment and Earnings,”

Robert J. Gordon and Ian Dew-Becker, “Unresolved Issues in the Rise of American Inequality,”

Browse through the first issue of on blockchain governance, read (or not) as you find useful.


IV. Organization and capital structure


Ronald Coase and Oliver Williamson on the firm, if you haven’t already read them, but limited doses should suffice.

Gibbons, Robert, “Four Formal(izable) Theories of the Firm,” on-line at

Van den Steen, Eric, “Interpersonal Authority in a Theory of the Firm,” American Economic Review, 2010, 100:1, 466-490.

Lazear, Edward P. “Leadership: A Personnel Economics Approach,” NBER Working Paper 15918, 2010.

Oyer, Paul and Schaefer, Scott, “Personnel Economics: Hiring and Incentives,” NBER Working Paper 15977, 2010.

Tyler Cowen chapter on CEO pay in big Business, to be distributed.

Ben-David, Itzhak, and John R. Graham and Campbell R. Harvey, “Managerial Miscalibration,” NBER working paper 16215, July 2010.

Glenn Ellison, “Bounded rationality in Industrial Organization,” 

Miller, Merton, and commentators.  “The Modigliani-Miller Propositions After Thirty Years,” and comments, Journal of Economic Perspectives (Fall 1988): 99-158.

Myers, Stewart. “Capital Structure.” Journal of Economic Perspectives (Spring 2001): 81-102.

Hansemann, Henry.  “The Role of Non-Profit Enterprise.” Yale Law Journal (1980): 835-901.

Kotchen, Matthew J. and Moon, Jon Jungbien, “Corporate Social Responsibility for Irresponsibility,” NBER working paper 17254, July 2011.

Strictly optional but recommended for the serious: Ponder reading some books on competitive strategy, for MBA students.  Here is one list of recommendations:

Furman, Jason. ”Business Investment in the United States: Facts, Explanations, Puzzles, and Policy.” Remarks delivered at the Progressive Policy Institute, September 30, 2015, on-line at

Scharfstein, David S. and Stein, Jeremy C.  “Herd Behavior and Investment.”  American Economic Review 80 (June 1990): 465-479.

Stein, Jeremy C. “Efficient Capital Markets, Inefficient Firms: A Model of Myopic Corporate Behavior.” Quarterly Journal of Economics 104 (November 1989): 655-670.


V. Sectors: finance, health care, education, international trade, others 

Gorton, Gary B. “Slapped in the Face by the Invisible Hand: Banking and the Panic of 2007,”, published on-line in 2009. 

Erel, Isil, Nadault, Taylor D., and Stulz, Rene M., “Why Did U.S. Banks Invest in Highly-Rated Securitization Tranches?” NBER Working Paper 17269, August 2011. 

Healy, Kieran. “The Persistence of the Old Regime.” Crooked Timber blog, August 6, 2014.

More to be added here, depending on your interests.


I see you expect your students to have the same reading habits as you. Good to teach them the right habits from the start, I say.

What beneath the fold? Is there a premium blog available?

The issue here is your list isn't long enough.

Sir, we read that last week.
F.A Hayek, The Road to Serfdom

Dynamism, or the absence of it, is a recurring theme in Cowen's blog posts, reading lists, and books. I think about it a lot. And Rene Girard. Sure, most of us are aware that social media has diminished creativity: everybody just wants to be like Mike (that's an expression). But one can see it in almost every sector. I have a home in the low country. Since the economic recovery, construction of housing has exploded, most of it by a single developer/builder, housing that dominates the market and absorbs the demand. These are cooker-cutter housing units, poorly constructed, but with the (same) features every buyer values - they are cute in a low country style way, entire tracts improved with look-a-like houses. Sure, this describes the post-war suburbs of every city, but this isn't the suburbs of a city. Sector after sector there is a sameness, whether housing, clothing style, entertainment, books (how many Dan Brown copy-cats are there?), or political preference. And dare I say it, in economic ideas. Dynamism? Hardly. What many get wrong is to make the assumption that tech, by contrast, is dynamic, when in fact tech by its nature is the opposite of dynamic: it is all about replication ("scale" being the catchword). The irony here is that the era of individual expression has been followed by the era of the copy-cat.

How come you double down on Michael Jordan? Unix is probably the most dynamic software because it allows for daemon accrual. I actually prefer in this case and terminate and stay resident program because it allows for scale, as if "off," when its restoring the main frame..

Dynamism in science:

I'm really not accosting ratiocination, what i'm asking about is pollination, considering the circuitry system demands a full always on --affection.

The "sameness" keeps the price down.

I would to to see more IO theory, for example a few chapters of Tirole's textbook, or Schmalensee's handbook.

I'd also like to see some essays by Carlton, Posner and Shapiro on policy.

Is every student meant to read every work on the list? If not, what is the point of such a list being provided without guidance?

Points of detail: why on earth would anyone provide such a list without numbering each recommendation, and without use of alphabetical order?

It looks to me like an exercise in self-indulgence. An intellectually serious student should throw a tomato.

Not self-indulgence, status signalling. And a seriously motivated go getter in the DC policy world would never think of throwing a tomato at a potential meal ticket.

What value do numbers and alphabetical order add? Ctrl+F suffices.

This is pretty standard for a grad class.

As a student you take the class because you want to learn a field, and this kind of curated list is valuable. The especially-motivated will read beyond it.

Good God, is it a graduate class? In which case insult the buggers all you want.

I would add two elements to the reading list:

1. Behavioral Industrial IO--(BEIO) How firms compete when their rivals also engage in behavior harmful to consumers. Look at Tremblay and Tremblay, New Perspectives On Industrial Organization With Contributions from Behavioral Economics and Game Theory (Springer 2012). See also, Zamir and Teichman, Behavioral Law and Economics (Oxford 2018) chapters on consumer contracts, corporate contract, antitrust, and regulation.

2. Drop articles and textbooks altogether at the end of the class and give them data to play with and explore. First, teach the elasticity, how people look at barriers to entry, how to measure and define markets, etc. Then, give them a dataset to work with and show them where they can find data (census, IRS, export/import data, typical corporate databases, etc.) to examine an industry: So, where might you start: well, start to seed the data: start with an FTC merger case, or a lower court decision that pumps out a lot of data, such as some of the antitrust cases in the cigarette industry.

Now, have them write up a case study of the industry and where it has been and where it is going.

At the end, and as an exam question, ask: What have you learned from all the articles that I have given you to read that is contradicted by the evidence you wrote in your case study. What evidence in your case study was confirmed by the articles.

The incentive structure implied by the lecturer of the course also examining the course is dire. No True Economist could cooperate in such a venture.


Then your comment suggests it is a screening mechanism to separate a true economists from a human.

Moreover your proposed examination question would allow the examiner to know the identity of the candidate whose script he is marking. Again, that leads to a dire incentive structure. I hesitate to say "Solve for the equilibrium" because the equilibrium would obviously be arse-licking en masse.

But isn't answering a question on an exam regarding a theory favored by the lecturer just as likely to lead to "arse-licking" en masse"

How does it taste?

You miss the point. The lecturer ought never to be the examiner.

That's a good point. But, who hires the examiner: the lecturer or the school. What if the examiner disagrees with the lecturer? Who's responsible for teaching the student and the learning outcome?

I do like the idea of passing off the grading of exams to someone else though.

Very interesting list. Thank you for posting.

When I see all these titles, I wonder the economics profession does not study the comparative efficiencies of governments (call it state capacity) the way it studies private firms. Economists like Coase and Williamson stopped treating firms as a black bloc, but economics as a discipline still treats government as a black box. Why does mile of subway in NY cost 5x more than in London or Paris? I see titles like “Explaining Cross-Country Productivity Differences in Retail Trade.” Would be interesting to see “Explaining Cross-Country Productivity Differences in Public Infrastructure.”

You might ask, concerning comparative efficiencies in governments, is whether the government outsources or contracts out the purchase of goods or services it then makes available to citizens, and whether that contract process that employs persons or companies in the market, is efficient and designed to get the best price and service.

Most or much of government activities (other than the military, but even there, the military budget is goods and materials) relies on a private market in which the government purchases

From your examples, what you are really looking at is procurement practices and transparency, and markets where there may be few providers.

Indeed, those are the questions that need to be asked. Also monitoring by the government after the contract has been entered into. This is only casual evidence, but I constantly see construction sites on the streets here in New York without any worker for weeks and months.

Agreed. Competition in procurement and vigorous oversight of goods and services procured in the private market. When we talk about government efficiencies, though, some might think that we are talking about some government employee sitting behind a desk, when we should really be focusing on law and procedures re procurement and bidding, and mechanisms for oversight that need to be in place for failure of performance.

We also need to look at measurable outcomes. So, for example, there is movement afoot to block grant medicaid spending to the states without keeping in place the required outcomes or services to the communities. Without those features, what you will see is the states giving hospitals more money...but, reducing the number of people who qualify for assistance or doing so by conditioning assistance that will reduce the number of people being served. Here, you are reducing efficiency by rewarding hospitals to serve fewer people.

In the Cowen-Southwood paper there is a graph of world GDP, and they write: "You can see that world GDP has risen from well below $10 trillion in 1965 to over $80 trillion today, an impressive increase over a period of about fifty years."

But that is in current U.S. dollars. Adjust for inflation and the world economy went from "well below $75 trillion in 1965 to over $80 trillion today" in constant dollars.

On total factor productivity they write: "American TFP typically grew quickly in the 1920s and 1930s, ranging from between two to slightly over three percent per year." I'm not sure how it could range from a low of 2% then as the average for the 1920s was 1.4%. The average TFP growth for the 1930s was 1.7%.

Robert Gordon's TFP graph:

Add a section for hiring, managing, and developing talent!

How about a semester's worth of daily Matt Levine Money Stuff? Would illuminate practicalities of daily industrial organization and pitfalls thereof

The linkedin link looks to be broken. Anyone know where I can find the correct one?

Link to an ungated copy of rhe Erel, et. Al. Paper:

I thought you would include something from Stratechery?

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