Many industries consist of similar, but not identical, products. Examples include the airline, automobile and processed food industries. In order to examine questions such as the likely effects of a merger, the welfare gains from introduction of new goods, non-linear pricing, price discrimination, and network effects, one needs to recover the structural cost and demand functions as well as the game being played by the industry players.
This masterclass will discuss recent developments in empirical approaches to the study of these industries. Following much of the recent literature the focus will be on modeling and estimation of demand with a focus on flexible models and credible identification. Applications to different questions in several industries will be covered. Most of the focus will be on static models with a brief discussion of dynamic models.