Mainstreams in Industrial Organization: Book I. Theory and International Aspects. Book II. Policies: Antitrust, Deregulation and Industrial

461 Pages·1986·9.59 MB·English

by  F. M. Scherer (auth.)

MAINSTREAMS IN INDUSTRIAL ORGANIZATION
STUDIES IN INDUSTRIAL ORGANIZATION
Volume 6
Series Editors:
Professor H.W. de long, University of Amsterdam, The Netherlands.
Professor W.G. Shepherd, University of Michigan, Ann Arbor, Michi
gan, USA.
Advisory Board
Professor W. Adams, Michigan State University, East Lansing, Michi-
gan, USA.
Professor R.E. Caves, Harvard University, Cambridge (Mass.), USA.
Professor K.D. George, University College, Cardiff, United Kingdom.
Professor E. Heu5z, Friedrich Alexander University, Erlangen-
Niirnberg, West Germany.
Professor A.P. lacquemin, University of Louvain, Belgium.
Professor H.W. Lambers, Erasmus University, Rotterdam, The
Netherlands.
Professor R. Prodi, University of Bologna, Bologna, Italy.
Professor T. Wilson, University of Glasgow, Glasgow, United
Kingdom.
Mainstreams in Industrial
Organization
Book I. Theory and International Aspects
edited
by
H.W. de Jong
University oj Amsterdam, The Netherlands
w.o. Shepherd
University oj Michigan at Ann Arbor, U.S.A.
SPRINGER-SCIENCE+BUSINESS MEDIA, B.V. "
1986 • .,
Library of Congress Cataloging in Publication Data
Mainstreams in industrial organizatien.
(Studies in industrial organizat ion ; 6)
1. Industrial organization--Congresses.
2. Managerial economics--Congresses. 3. lrade
regulation--Congresses. 4. Industry and state-
Congresses. I. Jong, H. W. de. Il. Shepherd,
William G. III. Series.
HD29.M25 1986 338.6 86-12345
ISBN 978-94-017-0495-3 ISBN 978-94-017-0493-9 (eBook)
DOI 10.1007/978-94-017-0493-9
Copyright
© 1986 by Springer Science+Business Media Dordrecht
Originally published by Martinus Nijhoff Publishers, Dordrecht in 1986
Softcover reprint of the hardcover 1s t edition 1986
AH rights reserved. No part of" this publication may be reproduced, stored in a re
trieval system, or transmitted in any form or by any means, mechanical,
photocopying, recording, or otherwise, without the prior written permis sion of
the publishers, Springer-Science+Business Media, B.V.
PREFACE
The present two volumes contain the essays and part of the discussions
as presented at the conference on Mainstreams in Industrial Organiza
tion, held at the University of Amsterdam, 21-23 August 1985. The
thema was chosen because the field of studies commonly designated
"industrial organization" in the Anglo-Saxon countries, or "market
theory" in Continental Europe, has experienced important alterations
during the past decade.
Partly this reflects changing theoretical views inside the field, in which
shifts in the core concepts have occurred and different emphasis is laid
on time-honoured views and results. Partly, critical views have been
voiced from outside the field. As in all open scientific debate, they have
to be weighed and, if necessary, taken into account. Partly also, diver
gent developments in thinking between the Anglo-Saxon, European and
Japanese areas need to be considered, because both the problems and the
ways of approaching them still differ.
The variety of views, theori~s and results is testimony to the vitality of
this field of economics; variety is generated by the creative endeavours,
from which the chaff is being beaten out by critical discussions. That is
especially true for the concept of competition itself, which industrial
organization economists are debating intensively.
But it should not be thought that the participants lack a common
understanding. As this conference brought forward again, the economists
assembled here share the view that the study of the market economy
needs a measure of realism in order to be worthwhile. Realism involves
taking note of market situations as well as market processes, of recog
nizing entrepreneurial actions as well as power games, of modelling
behaviour as well as investigating empirical evidence, of looking for
shifts in explanations of what occurs as well as for policies that need to
be widened or trimmed. Negatively, such realism rejects "l'art pour l'art"
theorizing as well as pure empiricism or description.
v
VI
Such a program is strewn with difficulties, as a reading of the two
volumes brings out. No useful purpose is served by denying that indus
trial organization means to study very complex phenomena. It should
nevertheless encourage industrial organization economists to persevere
in their efforts, for amidst useless shells many valuable pearls can be
found.
The editors are grateful, both to the organizing institutions - the
University of Amsterdam and the Universities of Michigan and
Massachusetts - for their support and to the economists who presented
papers and who took part in the lively discussions. They also invite
readers from a wider audience to join in the experience, which shows that
industrial organization economists do not represent a single orthodoxy
or "school". For a school of thinking has some resemblance to a cartel:
it easily degenerates into predictable behaviour and the blocking of new
initiatives.
The pairing of views on five different themes, contained in these
volumes, should therefore be a challenge to readers to contribute them
selves the innovations required in this fascinating field in the coming
decades. If that occurs the highest hopes of the conference's organizers
will be fulfilled.
W. G. SHEPHERD
University of Michigan
H. W. DEJONG
University of Amsterdam
CONTENTS
Preface V
List of Contributors IX
BOOK I. Theory and International Aspects
Part I. Theory
1. On the Current State of Knowledge in Industrial
Organization
by F. M. Scherer 5
2. On the Core Concepts of Industrial Economics
by W. G. Shepherd 23
3. European Industrial Organization: Entrepreneurial
Economics in an Organizational Setting
by H. W. de Jong 69
4. Mainstreams in Industrial Organization: Challenges and
Tasks
by C. Green 113
5. On the Currents in Mainstream Industrial Organization
by A. M. Hendriks 121
Part II. International Aspects
6. International Competition, Productivity Change and the
Organization of Production
by G. Eliasson 127
7. Industrial Organization in an International Framework
by T. Nakao 159
8. Exporting Behaviour and Market Structure: Evidence
from the United States
by R. Caves 189
VII
VIII
BOOK II. Policies: Antitrust, Deregulation and Industrial
Part III. Antitrust Policy
9. United States' Antitrust: At the Crossroads
by D. C. Mueller 215
10. The Treatment of Dominant Forms in U.K. Competition
Legislation
J. D. Gribbin and M. A. Utton 243
11. The Treatment of Dominance in German Antitrust Policy
E. Kantzenbach 273
12. Competition Policies and Measures of Dominant Power
R. Linda 287
13. Lessons of Economics for Antitrust: Problems of
Antitrust for Economists
by E. M. Fox 309
Part IV. Deregulation
14. What Do We Understand about the Economics of
Regulation? The Effects of U.S. Transport Deregulation
by K. D. Boyer 315
15. Deregulation of European Air Transport
by J. Pelkmans 347
Part V. Industrial Policy
16. Industrial Policy in Theory and Reality
by H. Odagiri 387
17. Public Support of Innovative Activity; Lessons from U.S.
Industrial Policy
by W. Adams and S. Martin 413
18. Industrial Policy and Innovation in Europe
by W. Kingston 441
Bibliography 463
LIST OF CONTRIBUTORS
Walter Adams, Associate Professor of Economics and Law, The Univer
sity of Michigan, Ann Arbor, Michigan, U.S.A.
Kenneth D. Boyer, Professor of Economics, Michigan State University,
East Lansing, U.S.A.
Richard E. Caves, PrOfessor of Economics, Harvard University, Cam
bridge (Mass), U.S.A.
Gunnar Eliasson, President, The Industrial Institute for Economic and
Social Research (IKI), Stockholm, Sweden.
Eleanor M. Fox, Professor of Law, New York University, New York,
U.S.A.
Chris Green, Professor of Economics, McGill University, Ottawa,
Canada.
Ann M. Hendriks, Assistant Professor of Economics, Tufts University.
Dennis C. Gribbin, Economist, The Monopolies Commission, London,
U.K.
Henk W. de Jong, Professor of Economics, University of Amsterdam,
The Netherlands.
Eberhard Kantzenbach, Professor of Economics, University of Ham
burg, President of Monopol Kommission, West Germany.
William Kingston, John Good Senior Lecturer (Innovation), Trinity
College, Dublin, Ireland.
Remo Linda, Economist, Commission of the European Communities,
Brussels, Belgium.
Stephen Martin, Assistant Professor of Economics, Michigan, Mary
land, U.S.A.
Dennis C. Mueller, Professor of Economics, University of Maryland,
Maryland, U.S.A.
Takao Nakao, Professor of Economic, Doshisha University, Kyoto,
Japan.
IX