Strategy I: Econometric tools for strategy research
B30.4301.20


Friday 15:00 to 18:00 in 7-191.

This course is intended to develop the toolbox of PhD students intending to pursue research in strategy (or other business related fields). It focuses on the set of tools that are provided by the discipline of economics, hence a focus on models of oligopoly and contract theory, and a focus on empirical tools such as the measurement and identification of treatment effects and basic econometrics.

This course is about tools that are useful for the execution of the research spurred by your answers to these questions. The tools covered in this course will be drawn from the field of economics. Hence, this will feel like a applied micro course most of the time. As a result it will likely also be useful to people looking at doing research Industrial Organization, Labor Relations, Marketing, Empirical Corporate Finance, Empirical Accounting and other areas of business related research when field data needs to be interrogated and interpreted.

We will cover some areas of micro theory that are important for understanding firm behaviour. This will cover the first 4 weeks of the course. We will assume you have done a micro course at the PhD level before, and that this course covered basic game theory and demand and supply (price theory). Bits of these four weeks will likely feel like revision, but it is good to go over this stuff from an applied perspective anyway.

Following that we will think about how to use data to understand the world. Economics has been quite successful at developing ways to infer stuff from data. The field of econometrics combines ideas from economic theory models and statistical methods in a way that gives a very powerful approach to inference when confronting data that are contaminated by market forces (ie. when the data comes from a market interaction rather than a lab or field experiment).

In the language of econometrics we will be looking at reduced form micro-econometrics with particular attention on issues of identification, both theoretical and in application. To do this well, you need to understand econometric technique, theory and how to mesh the two together and it is an appreciation of this meshing process that is our ultimate goal for the course.

Increasingly, applied work lives or dies on how compelling the identification strategy is, and the art of constructing a good identification strategy in data work is important to being a good applied researcher.

Assessment

Four problem sets: One theory and three empirical. In class participation will count for an additional 20%. Participation means reading the assigned papers and thinking about them. You lose 1% every time you have to admit that you didn't read the paper being discussed. Occasionally we will ask you to present papers. This will be good practice for you so you should be eager to do this. good presentation skills are critical to a successful career.

Recommended Books

Topics and reading by week

Research