The Theory of Industrial Organization [Hardcover]

Jean Tirole (Author)

Book Description

Publication Date: January 1, 1988

The Theory of Industrial Organization is the first primary text to treat the new industrial organization at the advanced-undergraduate and graduate level. Rigorously analytical and filled with exercises coded to indicate level of difficulty, it provides a unified and modern treatment of the field with accessible models that are simplified to highlight robust economic ideas while working at an intuitive level.To aid students at different levels, each chapter is divided into a main text and supplementary section containing more advanced material. Each chapter opens with elementary models and builds on this base to incorporate current research in a coherent synthesis.Tirole begins with a background discussion of the theory of the firm. In part I he develops the modern theory of monopoly, addressing single product and multi product pricing, static and intertemporal price discrimination, quality choice, reputation, and vertical restraints.In part II, Tirole takes up strategic interaction between firms, starting with a novel treatment of the Bertrand-Cournot interdependent pricing problem. He studies how capacity constraints, repeated interaction, product positioning, advertising, and asymmetric information affect competition or tacit collusion. He then develops topics having to do with long term competition, including barriers to entry, contestability, exit, and research and development. He concludes with a "game theory user's manual" and a section of review exercises.Jean Tirole is a Professor of Economics at MIT

Editorial Reviews

Review

"I think that this book will fill a tremendous void in the textbook market for advanced undergraduate and graduate level courses in industrial organization and applied microeconomics. The strength of Tirole's work is his masterful synthesis of analytical development and intuitive discussion. Consequently, he makes understandable to the reader some very advanced research. This synthesis will prove invaluable to graduate students who are looking for a research niche of their own." John P. Bonin , Professor of Economics, Wesleyan University

About the Author

Jean Tirole is Scientific Director of IDEI (Institut d'Economie Industrielle), Chairman of the Board of TSE (Toulouse School of Economics), and Annual Visiting Professor of Economics at MIT.

Product Details

• Hardcover: 479 pages
• Publisher: The MIT Press (January 1, 1988)
• Language: English
• ISBN-10: 0262200716
• ISBN-13: 978-0262200714
• Product Dimensions: 10.1 x 8.7 x 1.4 inches
• Shipping Weight: 3.1 pounds (View shipping rates and policies)
• Average Customer Review: 5.0 out of 5 stars  See all reviews (9 customer reviews)
• Amazon Best Sellers Rank: #67,268 in Books (See Top 100 in Books)
  • #64 in Books > Business & Investing > Management & Leadership > Negotiating

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Customer Reviews

Most Helpful Customer Reviews

44 of 46 people found the following review helpful:

5.0 out of 5 stars Very good book, but not for everyone, January 13, 2001

By A Customer

This review is from: The Theory of Industrial Organization (Hardcover)

This book is absolutely the "classic" in IO. The author amazingly provided very clear and coherent exposition to this huge, but diverse field. But, this book is not for everyone as some reviews below implied. First, consultants or managers may not find this book useful for the real-life application, because this is a (rather serious) "theory" book. It has no detailed cases, no practical managerial implications, and so on. For that purpose, there are many other good books like Schere, or Carlton & Perloff, etc. The virtue of this book lies in the author's capability to make accessible otherwise very complicated and abstruse models, which would be mainly the concern of grad students in econ, not consultants. Therefore, econ students who are interested in theory development in IO would quickly grasp the essence of important IO models with a simple algebra. I don't understand what part of the book some people think is useful as a reference for the consultants or even everyone.

Second, simple algebra in the book does not mean it is accessible to "everyone." At the introductory grad level, game thoery and information economics use only basic algebra, but it is still not easy at all. Of course, this book introduces almost all important topics usually taught in the first-year micro sequence at graduate school, like repeated game (Ch 6), basic mechanism design technique (non-linear pricing in Ch 3), principal-agent problem (Ch 1), and so on. It would be misleading if one says these topics are accessible to everyone because of "minimal use of math." Even chapter 1, the theory of firm, is a very deep discussion, introducing the concept of "incomplete contract."

In my opinion, this book will be ideal for econ grad students, who would want to quickly review relevant chapters before moving into more recent IO literature (of course, now with full rigor).

10 of 10 people found the following review helpful:

5.0 out of 5 stars The best IO book around, January 5, 2001

By 

Rodrigo Fenton (Mexico City, Mexico D.F. Mexico) - See all my reviews

This review is from: The Theory of Industrial Organization (Hardcover)

I studied Economics, soon after found myself working as a consultant, and still I keep this book on the shelf as reference in case I need it. IO is the most important branch of Economics with direct applications on the business world. This book is entirely theoretict and contains only the most significant models, along with references to other papers related the subject. The only addition I would make to this book is to incorporate some practical information to see the power of the models explaining the real world.

Before starting to shout that a "New Economy has come!", people should focus more on the intrincate models already developed by economists ranging so different subjects as: differentiation, entry, information, innovation, etc. When I wrote my thesis on e-commerce, ...

A word of advice: You need very good grounding in Game Theory (beyond the initial stuff you learn at intermediate Microeconomic level), if not, try reading the appendix on Game Theory before inmersing on the subject.

7 of 7 people found the following review helpful:

5.0 out of 5 stars Still "the" reference in IO, June 14, 2000

By A Customer

This review is from: The Theory of Industrial Organization (Hardcover)

Although the book is now 12 years old, it is still the most recommended reference in top academics departments. The clarity of the writing and the width of the content (from the basics to a very advanced level) are some obvious qualities. The use of math is restricted at its minimum, with many graphics to emphasize intuition. The author, known as one of the leading scholars in micro theory, has also introduced many examples of applications and exercices. In the age of the Microsoft trial and antitrust issues, this is a book that will interest everyone. For the record, I have heard it will soon be translated in Chinese (mandarin) !