Examples of questions that economists specializing in Industrial Organization (IO) analyze include but are not limited to the following:
• Market power and strategic interaction: What does market power mean, how is it created, and how is it sustained? What does strategic interaction between firms mean? How do market power and strategic interaction between firms affect market outcomes?
• Mergers and collusion: Why do firms merge? How many cartels are there, and how harmful are they? What does it mean when firms collude tacitly?
• Pricing and market entry and exit: How should a multiproduct-firm price its products? How does the entry of a new competitor affect pricing? Why and when do new firms enter and some firms exit?
• Innovation and research and development (R&D): What determines how much a firm is willing to invest in R&D? Should the government subsidize the R&D activities of firms and if so, how and by how much? What is the relationship between competition and innovation?
• Regulation and competition policy: Who benefits and who loses when a market is liberalized? When should a competition authority allow a given proposed merger? How can a competition authority deter collusion?
