LEARNING OUTCOMES
The purpose of the course is to familiarize students to advanced topics and methods in Empirical Industrial Organization (IO). At the end of the course, students have learned how to estimate static demand and supply using both market level and individual level data, and how the estimation results can be used in applications. The course will start the process of preparing economics Ph.D. students to conduct thesis research in this area.
Credits: 6
Schedule: 08.01.2024 - 15.04.2024
Teacher in charge (valid for whole curriculum period):
Teacher in charge (applies in this implementation): Iivo Vehviläinen, Otto Toivanen
Contact information for the course (applies in this implementation):
The course has 4 teachers: Ari Hyytinen, Tanja Saxell, Otto Toivanen and Iivo Vehviläinen. If you have general questions, Otto or Iivo are a good starting point. For substantive matters you can ask the relevant lecturer directly.
Our TA is Helena Rantakallio.
CEFR level (valid for whole curriculum period):
Language of instruction and studies (applies in this implementation):
Teaching language: English. Languages of study attainment: English
CONTENT, ASSESSMENT AND WORKLOAD
Content
valid for whole curriculum period:
The course starts with a reminder of logit and nested logit models before moving on to BLP models, identification issues, and the choice of optimal instruments. In addition, we will cover market power and merger analysis, and other applications.
Assessment Methods and Criteria
valid for whole curriculum period:
Exercises (60 %), exam (40 %)
applies in this implementation
Tentative plan for the exam: take-home exam during week starting 22 April 2023
Workload
valid for whole curriculum period:
Contact teaching, independent work, exam
DETAILS
Study Material
valid for whole curriculum period:
Research articles assigned during the course.
applies in this implementation
See separate reading list.
The assumption is that the materials marked as mandatory are read by the lecture they are discussed.
Substitutes for Courses
valid for whole curriculum period:
Prerequisites
valid for whole curriculum period:
FURTHER INFORMATION
Further Information
valid for whole curriculum period:
Teaching Language : English
Teaching Period : 2022-2023 No teaching
2023-2024 Spring III-IVapplies in this implementation
This is a PhD level course. We expect that you have completed the first year sequence in micro and econometrics, and have background in IO.
Details on the schedule
applies in this implementation
Tentative plan below, changes possible to the content details
Week 1
Mon, 15 Jan 2024, 14.15-15.45 – U006 – Lecture 1 – Otto
Mon, 22 Jan 2024, 14.15-15.45 – U006– Lecture 2 – Otto
Introduction: Structural econometrics, modelling
Discrete choice models: Logit and nested logit, (welfare, interpretation of parameters, market& individual level data)
Exercise #1 (logit, nested logit), due 1 Feb
Week 2
Mon, 29 Jan 2024, 14.15-15.45 – U006 – Lecture 3 – Tanja
Mon, 5 Feb 2024, 14.15-15.45 – U006 – Lecture 4 – Tanja
Random coefficient models, BLP
New: individual level data, what to do with zero market shares
Exercise #2 (BLP), due 29 Feb
Week 3
Mon, 12 Feb 2024, 14.15-15.45 – U006 – Lecture 5 – Otto
19 Feb exam week / winter holiday
Mon, 26 Feb 2024, 14.15-15.45 – T003 – Lecture 6 – Otto
Topics: Reading group style treatment of a chosen paper
Supply side (start from simple logit / one product per firm).)
Exercise #3 (Simulate data), due 14 March
Week 4
Mon, 4 March 2024, 14.15-15.45 – T003 – Lecture 7 – Iivo
Mon, 11 March 2024, 14.15-15.45 – T003 – Lecture 8 – Iivo
Applications: 1) Merger simulation, 2) Market power
Exercise #4 (Merger simulation), due 28 March
Week 5
Mon, 18 March 2024, 14.15-15.45 – T003 – Lecture 9 – Ari
Mon, 25 March 2024, 14.15-15.45 – T003 – Lecture 10 – Ari
Econometric identification, normalizations in identification, instruments for and identification in BLP
New: outside good (definition, estimation etc.)
No exercise
Week 6
Mon, 1 April 2024, Easter
Mon, 8 April 2024, 14.15-15.45 – T003 – Lecture 11 – Tanja
Mon, 15 April 2024, 14.15-15.45 – T003 – Lecture 12 – Otto
Tanja: Demand estimation: Choice frictions, other firm decisions
Otto: Consideration sets, pass-through
No exercise