Markov Perfect Industry Dynamics:
Recent Advances in Applications of Dynamic Oligopoly Models
The 2010 Leverhulme Lecture is being given on Tuesday, May 25, 2010 by Professor Lanier Benkard of the Yale University Department of Economics.
Lanier suggested the following as background material for his lecture (download all papers as zip):
- Ackerberg, Benkard, Berry, and Pakes (2006), "Econometric Tools for Analyzing Market Outcomes," a chapter prepared for the Handbook of Econometrics.
- The section of this chapter on dynamic estimation is a good first introduction to this topic.
- Weintraub, Benkard, and Van Roy (2008), "Markov Perfect Industry Dynamics with Many Firms," Econometrica, v76n6 (November), 1375-1411.
- Weintraub, Benkard, and Van Roy (2009), "Computational Methods for Oblivious Equilibrium," Working paper, Yale University.
- Benkard, Jeziorski, Van Roy, and Weintraub (2009), "Oblivious Equilibrium with Dominant Firms," Working paper, Yale University.
- Weintraub, Benkard, Jeziorski, and Van Roy (2008), "Nonstationary Oblivious Equilibrium," Working paper, Yale University.
- These papers represent recent research by Lanier and co-authors on Oblivious Equilibria, an approximation to Markov-Perfect Equilibria (the equilibrium concept commonly used in empirical dynamic oligopoly models) in markets with many firms.
- Bajari, Benkard, and Levin (2007), "Estimating Dynamic Models of Imperfect Competition," Econometrica, v75n5 (September), 1331-1370.
- Ryan, S. (2009), "The Costs of Environmental Regulation in a Concentrated Industry," Working paper, MIT.
- Benkard, Bodoh-Creed, and Lazarev (2010), "Simulating the Dynamic Effects of Horizontal Mergers: U.S. Airlines," Working paper, Yale University.
- The first of these papers is BBL, one of several papers introducing tractable estimation methods for dynamic oligopoly models.
- The second and third are applications that use BBL in particular settings.
Workshop on estimating dynamic oligopoly models
In addition to his Leverhulme Lecture on Tuesday at 4:00, Lanier will also be holding a workshop on Wednesday, May 26, 2010 from 11:00-1:00 p.m. in S2.79.
In this workshop, Lanier will lecture further about the details of estimating dynamic oligopoly models and present examples that use these techniques from the recent IO literature (see especially the last 3 papers above). The target audience for this workshop includes PhD students and faculty interested in estimating dynamic oligopoly models. The level will be that of a 2nd-year PhD course.