The BBVA Foundation recognizes Bresnahan, Pakes and Porter for opening up the field of empirical industrial organization
The BBVA Foundation Frontiers of Knowledge Award in the Economics, Finance and Management category goes, in this tenth edition, to Timothy Bresnahan, Ariel Pakes and Robert Porter for founding and shaping the field of empirical industrial organization, a branch of economics that has developed fundamental techniques to measure market power (understood as the ability of a firm to control prices in a given industry). “Motivated by important and policy-relevant questions in applied economics,” remarks the jury in its citation, “they developed methodologies that had a significant and long-lasting impact on subsequent work in industrial organization as well as other applied fields.”
20 February, 2018
The first major contribution of professors Bresnahan, Pakes and Porter was to undertake empirical studies of market power in modern markets, using methods that lent themselves to the rigorous testing of hypotheses. “We have been very concerned,” Bresnahan explained after hearing of the award, “that declines in the degree of competition in many markets in the rich countries have led to an increase in market power,” with the result that “technical progress, which should serve to lower prices for consumers, has instead been captured by sellers.”
