Experiments in Industrial Organization

Abstract This chapter overviews the application of experimental methods in the field of industrial organization (IO). It begins by making the case for the use of such methods in this important field, arguing that experimental methods give a unique opportunity to the IO theorist to test theories under controlled conditions which exactly reproduce the theoretical environment in the laboratory. Some broader methodological points are also made. The chapter then gives an overview of past and present experimental work in industrial organization and demonstrates that such work has provided important insight into key theories and concepts in tO. A number of illustrations are given, both past and potential. The chapter concludes by discussing those areas of industrial organization which have not yet benefitted by exposure to experimental investigation but which could fruitfully be so exposed, and by arguing that such investigation could ultimately lead to a transformation in the way theorists view the field of IO.