Industrial organization is the field of economics that builds on the theory of the firm in examining the structure of, and boundaries between, firms and markets.
The subject has been described as concerned with markets that "cannot easily be analyzed using the standard textbook competitive model." Industrial organization adds to the perfectly competitive model real-world frictions such as transaction costs, limited information, and barriers to entry of new firms that may be associated with imperfect competition. It analyzes determinants of firm and market organization and behavior as between competition and monopoly, including from government actions.
There are different approaches to the subject. One is descriptive in providing an overview of industrial organization, such as measures of competition and the size-concentration of firms in an industry. A second uses microeconomic models to explain internal firm organization and market strategy. As to strategic firm interaction, non-cooperative game theory has become the standard unifying method of analysis. A third aspect is oriented to public policy as to economic regulation and antitrust law.
The development of industrial organization as a separate field owes much to Edward Chamberlin, Edward S. Mason, and Joe S. Bain.
Read more about Industrial Organization: Structure, Conduct, Performance, Market Structures, Areas of Study, History of The Field
Famous quotes containing the words industrial and/or organization:
“Your organization is not a praying institution. It’s a fighting institution. It’s an educational institution right along industrial lines. Pray for the dead and fight like hell for the living!”
—Mother Jones (1830–1930)
“I will never accept that I got a free ride. It wasn’t free at all. My ancestors were brought here against their will. They were made to work and help build the country. I worked in the cotton fields from the age of seven. I worked in the laundry for twenty- three years. I worked for the national organization for nine years. I just retired from city government after twelve-and-a- half years.”
—Johnnie Tillmon (b. 1926)