Empirical Industrial Organization: A Progress Report

T he fi eld of industrial organization has made dramatic advances over the last few decades in developing empirical methods for analyzing imperfect competition and the organization of markets. These new methods have diffused widely: into merger reviews and antitrust litigation, regulatory decision making, price setting by retailers, the design of auctions and marketplaces, and into neighboring fi elds in economics, marketing, and engineering. Increasing access to fi rm-level data and in some cases the ability to cooperate with fi rms or governments in experimental research designs is offering new settings and opportunities to apply these ideas in empirical work. This essay begins with a sketch of how the fi eld has evolved to its current state, in particular how the fi eld’s emphasis has shifted over time from attempts to relate aggregate measures across industries toward more focused studies of individual industries. The second and primary part of the essay describes several active areas of inquiry. While this is in some sense a survey, our goal is not to be comprehensive but to highlight key ideas and illustrate how modern research has approached different problems. We also discuss some of the impacts of this research and specify topics where research efforts have been more or less successful. The last section steps back to offer a broader perspective. We address some current debates about research emphasis in the fi eld, and more broadly about empirical methods, and offer some thoughts on where future research might go. Empirical Industrial Organization: A Progress Report