Instructor Interview
Below, Prof. Glenn Ellison describes various aspects of how he and his colleagues taught 14.271 Industrial Organization I in the fall semester of 2022.
OCW: Most of the lectures in the course are built around everyday phenomena from contemporary consumer life: Amazon search results, airline ticket pricing, supermarket specials, and so on. Could you tell us the rationale for this focus on familiar examples?
Glenn Ellison: You don’t need to give the practical examples to explain the models, but I think having an example you can think about can help a lot with the intuition. It also helps the students think about other places where they might apply the models.
OCW: What roles did your colleagues Tobias Salz and Jean Tirole play in helping to teach the course?
Glenn Ellison: Tobias Salz is my co-instructor, although I did do most of the lectures. He had essentially a full load of other classes to teach that year, but I was busy also serving as department head, so I asked him if he could do a few lectures on topics that he knows better than I do. He also helped out with some of the problem sets and exams.
Jean Tirole, our guest lecturer, has had some type of affiliation—grad student, faculty member, visiting faculty member—for all but a few years since 1978. I’ve been teaching iterations of 14.271 for 30 years and he’s done a couple of guest lectures in most of them. His work in the 1980s played a major role in shaping the field as we know it today, but he’s still incredibly on top of new developments that might be promising for students to pursue, so I mostly give him carte blanche to lecture on whatever topic he thinks is interesting and work around it.
OCW: You describe the goal of the course as being “to start the process of preparing economics PhD students to conduct thesis research in the area.” How much of this process consists of introducing the students to essential information, and how much consists of guiding them in the practice of key skills?
Glenn Ellison: To work in IO these days there are many standard theoretical and empirical techniques that you need to be comfortable with. But a lot of the course is trying to get students to think about how authors of recent papers might have gone from the idea stage to a fully fleshed out paper. You need to read a lot to get a sense of how to do that yourself when you have an idea.
OCW: The field of industrial organization has been transformed by the development of the internet in the past thirty years, which has radically increased the availability of information and has revolutionized the way buyers and sellers do business. What lies ahead for your field? What are the biggest unsolved problems for future I/O researchers to tackle?
Glenn Ellison: Economics is rarely like math where there are longstanding unsolved problems. A lot of progress comes from noticing places where one thinks existing models don’t provide a very good understanding of what is going on. There’s also always a lot of good opportunities in studying new, emerging industries—it’s much easier to say something original about a business that didn’t exist 5 years ago than about the steel industry. The dramatic growth in the level of detailed data will surely continue, and figuring out how to draw insights out of such data sets will surely also be a continuing theme.
OCW: What would you like to share about teaching 14.271 that we haven’t yet addressed?
Glenn Ellison: It’s a course I’ve always loved to teach. It’s challenging to teach a PhD industrial organization class, because the field really builds on past work and it’s hard to fit in both all of the field’s received wisdom and recent papers that students can hope to extend in a one-year sequence. As the field has gotten more empirical, many other departments have largely abandoned trying to cover the theoretical side of the field and integrate the theory and empirics. I am happy to have had the opportunity to put this course online so students at schools that don’t have time to cover everything we’re doing can get exposed to it.
Curriculum Information
Prerequisites
None
Requirements Satisfied
14.271 is a required course for the PhD in Economics for students who are specializing in industrial organization as their major or minor field of study.
Offered
Every fall semester
Assessment
The course was graded on the following elements:
- Eight problem sets
- Midterm exam
- Final exam
Each element counted for roughly one-third of the course grade.
Student Information
Enrollment
15 to 30 students
Breakdown by Year
Mostly second-year PhD students
Breakdown by Major
About two-thirds economics PhD students; about one-third other PhD students
Typical Student Background
Many students had not previously taken an industrial organization class, but everyone had a good background in game theory and econometrics.
How Student Time Was Spent
During an average week, students were expected to spend 12 hours on the course, roughly divided as follows:
Lectures
Met 2 times per week for 1.5 hour per session; 26 sessions total
Recitations
Met 1 time per week for 1.5 hour per session; 13 sessions total
Out of Class
Outside of class, students completed assigned readings, worked on problem sets, and studied for the midterm and final exams.
