Course in Economics: Empirical modeling of dynamic firm decisions
Taught by Professor: Mark Roberts, The Pennsylvania State University, Pennsylvania, United States
Course description
This seminar will overview recent work on dynamic firm decisions. The first half of the course will develop and estimate a dynamic, structural model of firm investment in R&D. The firm's R&D investment affects the probability the firm develops new product or process innovations and these affect the future path of firm profits. The model provides a measure of the long-run expected return to R&D investment. The second half of the course will analyse entry and exit firms decisions. These decisions affect the profits of all firms in the market and the model estimates the fixed costs, entry costs, and the impact of entry and exit on market outcomes.
Course outline
- Dynamic structural modeling of firm investment in R&D.
- Practice session: development and specification of the investment model and the computer code (Matlab) to estimate the model.
- A dynamic model of firm entry and exit in an oligopolistic market.
- Practice session: empirical application of an entry and exit model and discussion of the computer code (Matlab) to estimate the dynamic model.
