This book systematically explores the field of economics traditionally known as industrial organization, although, especially in Europe, the term industrial economics is often applied in its stead. Industrial organization is concerned with how productive activities are brought into harmony with the demand for goods and services through some organizing mechanism such as a free market, and how variations and imperfections in the organizing mechanism affect the success achieved in satisfying an economy’s wants.
There are three main parts that have been changed in this edition. First, the materials on policy have been integrated into the analytics sections, permitting a more rigorous approach to policy questions and making the applications of theory more immediate. Second, during the past decade there has been an explosion of work on the theory of industrial organization and continuing, though less dramatic progress in our empirical knowledge of how structure, conduct, and performance are related. Although the sheer mass of materials necessitated greater selectivity than in previous editions, we believe we retain our claim to providing the most comprehensive integrated synthesis of current knowledge. Third, where appropriate, we provide more extensive use of mathematics and other accouterments of modern economics analysis.