Technology and Market Structure: Theory and History

Rating:
Summary: Endogenous barriers to entry and market structure
Review: I read this book in my first year of graduate study in Economics in a course on Industrial Organization. I highly recommend this book. It is NOT a text book, it does not go over the state of the art in I.O., it is Sutton's theory about market structure and concentration as shaped by ENDOgenous barriers to entry. This book is completely self contained but it carries over the line of research that Sutton started years ago with Sunk Costs and Market Structure in which he studied the role of Exogenous barriers to entry.

As with his previous book, I like it because it explains market structure using OBSERVABLE variables, because it tests the theory both via case study and via econometric methods and because it is full of innovative ideas. The way in which Sutton tackles the problem of multiplicity of Nash equilibria, what he calls "the bound approach", is still making me think one year later.