This text has been revised to reflect theoretical, empirical, and policy developments of the past decade. New insights into strategic behaviour from game theory are given attention. The chapters on antitrust policy have been integrated with the related theoretical materials.
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This review is written from a business school perspective,
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This review is from: Industrial Market Structure and Economic Performance (Hardcover)
This is a book about industry structure (think Porter's five forces). The third edition is from 1990, but that is only a slight modification of the 1980 edition. So the book is out of date. When I studied for my first degree I was told that Michael Porter used the material in this book and reversed engineered the findings. In economics and antitrust, perfect competition is ideal. In Porter's world imperfect competition is the ideal, because that makes companies more profitable. The book was written before the field of industrial organization was taken over by the game theoreticians in the 80s. When that takeover happened, many academics stopped doing empirical research. The game theoretic approach has not yielded much benefit for practical use in strategic management so that is really a sad development. The type of industry analysis featured in this book has also gone out of fashion in business school community. If you are interested in where Michael Porter got many of his ideas from, I think this book is very valuable. And even if the examples are out of date, a lot of the material is off course still valid.
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