Industrial Organisation

Industrial Organisation

Seminar 6 Market Structure and Performance 1. Examine the strengths and limitations of different ways of measuring company profitability (e.g. Tobins q and the price-cost margin) based on the Structure Conduct Performance (SCP) paradigm and other empirical methodologies.

2. Explain how the application to firm-level profitability data of variance decomposition techniques such as analysis of variance can shed new light on the long-standing debate as to whether performance depends primarily on industry-level or firm-level factors. 3. Compare and contrast the SCP and the New (Empirical) Industrial Organisation approaches to empirical research in industrial organisation.

4. Explain the construction of an empirical test for the relative merits of the Market Power and the Differential Efficiency hypotheses as explanations for variations in firm profitability.

5. What can be inferred about the intensity of competition by observing the patterns of variation in firm-level time-series profit rate data?

MTR