Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/26970
Title: Assessing new empirical industrial organization (NEIO) methods : the cases of five industries
Authors: Roy, A
Kim, N 
Raju, JS
Keywords: Competition
Empirical game theory
Industrial organization
Issue Date: 2006
Publisher: Elsevier
Source: International journal of research in marketing, 2006, v. 23, no. 4, p. 369-383 How to cite?
Journal: International journal of research in marketing 
Abstract: The methods proposed in the new empirical industrial organization (NEIO) literature have made significant contributions to our understanding of competitive behavior. However, these methods have yet to be compared with each other for their performance in explaining and diagnosing competitive market conduct. This inter-method comparison is important because conclusions about competitive behavior based on these methods have significant strategic as well as policy implications for firms. Our objective in this paper is to examine the performance of these different NEIO methods in terms of their discriminatory power, ability to identify strategic variables, and robustness in estimation. For empirical demonstration, we use data from diverse industries such as microprocessors, personal computers, facial tissue, disposable diapers and automobiles. Our results suggest that two commonly used NEIO methods-conjectural variation and non-nested model comparison-exhibit quite good convergence with each other and are consistent with a traditional time series method. This suggests that simpler methods such as conjectural variations deserve more credit. We also find that using these methods in tandem provides valuable additional information that may not be available when using any one method alone. While the emphasis in this study is on comparing different methods of analyzing competitive interaction, the findings also reveal some substantive insights about each market studied.
URI: http://hdl.handle.net/10397/26970
ISSN: 0167-8116
DOI: 10.1016/j.ijresmar.2006.06.001
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