The Use of Game Theoretical Models FOR EMPIRICAL INDUSTRIAL ORGANIZATION

This paper surveys the literature in which non cooperative game theory has been applied to empirical industrial organization. We concentrate on the research on structure and performance since game theory made its most profound inroads in this field and in industrial organisation in general, and- while it now spreads to all other fields in economics- empirical applications are coming up with an increasing rate. We focus on the econometric testing of real world data, mainly in the core area of industrial economics namely the relation between market structure and performance. We discuss the goals, results and problems involved in the existing literature and propose topics and methods which look promising. We expect empirical work based on game theoretical models to become a growth area in industrial organization following the progress made in theory over the past decades