Reddit mentions of The Theory of Industrial Organization (The MIT Press)

Industrial organization is a great and interesting field. Tirole's text on the topic from the 80's is easy to understand and explore with some calculus and game theory knowledge compared to many advanced texts. People should take a look at the field when they want to see what lies beyond the Perfect Competition model.

In the field, models deal with firms that have various market structure, maybe a single large firm that moves first, following by smaller firms, dynamic entry, technological change, etc, and firms use the tools of optimization and game theory to try and maximize their take, exclude other firms, and participate in proverbial gladiatorial combat for profits. The field tells us both when weird market structures can seemingly paradoxically lead to efficient outcomes, and when markets can collapse, or need things like anti-trust regulation, or other forms of intervention.

I'm not as aware of Tirole's personal work as I could be to write more prolificly about his specific contributions besides his text, but the Nobel committee always does a decent job with their technical appendixes to the award, here. For Tirole this seems to cover the gamut, which makes it unsurprising that he would get the award.

Relevant Links:

Jean Tirole @ IDEAS

Jean Tirole, "Industrial Organization," (1988) Ch 1.

Jean Tirole, "Industrial Organization" (1988), Amazon Link

Nobel Committee Scientific Information

Nobel Committee Information for the Public

What are you interested in learning about? I would be weary about the books peppajac217 suggested, I don't know anything about them, but such books usually don't go into any detail and are often very biased (some of the amazon reviews make them sound pretty awful). (Come on guys and girls, this is the math reddit, don't be like the rest of the idiots who claim economics is all bullshit and only ever used for bad reasons, that is incredibly naive and stupid).

Game theory (not sure if that needs explaining or not?) is used a lot for economic theory (particularly for microeconomics), so having at least a basic understanding of that can be useful, and it's a really fun topic. If you want a simple treatment, get Osbornes introductory text, otherwise get either Myersons or Fudenberg and Tiroles.

Microeconomics is mostly concerned with situations/decisions at the "micro" level, whether that be for individuals, producers, small groups etc. My favourite part of microeconomics is consumer theory which concerns itself with how people can optimally use their time and resources to maximise the enjoyment they get out of life. The core consumer theory basically assumes people/consumers are able to form a total order over the set of goods as otherwise you get messy properties (like cyclic ordering), a lot of people give economics flack for such assumptions, they're idiots, due to the impredictable nature of human decision making, economics is quite complicated, but it doesn't mean people shouldn't try to study it, such assumptions allow us to make interesting insights into the problem being studied (something physicists and other scientists do all the time) and one can always relax any of the assumptions they wish when analysing stuff if they want to. There is also producer theory which concerns itself with how producers can optimally produce to maximise benefit to society, profits or any other such objective, then general equilibrium theory basically takes these two subjects and throws them together to study it all at once, although the basics often take out producers and deal with a set of consumers with a starting allocation of resources. If you are more interested in learning about microeconomics, the most common graduate level text is the one from Mas-Collel, Green and Whinston, although you might want to look somewhere else to get a basic understanding of microeconomics before jumping right into that text. (People bitch about the amount of maths in that text, but if you have some background with differential equations, linear algebra and real analysis (ripping that straight from an amazon review, but it's about on par) then I don't see why you shouldn't be able to follow it).

Another part of microeconomics that is really interesting is industrial organisation (although one could possibly just class it with producer theory) which is concerned with studying the different types of market structure, like competitive markets, monopolies, duopolies etc. I'm not really sure about resources for this, I believe Tiroles text is considered good.

And now we get to macroeconomics, which is a beast. I work as an RA for a macroeconomist, have a degree in economics (I did undergrad majors in cs, economics and maths, I'm currently doing an honours year in pure maths) and yet the more I learn about macroeconomics, the less I feel like I understand what the fuck is going on. I feel like a lot of people equate economics with predicting the future state of an/the economy (like studying weather is only concerned with predicting the temperature long in the future? or biology is only concerned with predicting the exact population of a species long into the future?) which can be really annoying, but generally macroeconomics concerns itself with what happens aggregately and how that affects us as a whole. I'm not even going to attempt to suggest where the best place to look for learning macroeconomics, as I have no idea. Just note that it's rather complicated (anyone that claims otherwise is an idiot) and there is often a lot of disagreement on the topics that arise. Generally most economists consider most of the Austrian school to be a bunch of whackos (which is most certainly true for the large bulk of self called "Austrian economists" with absolutely no economics training, or a couple of undergraduate classes in college), I personally don't feel I have a good enough understanding to really hold my own opinions (not like it stops everyone else from it though right? It really annoys me how many people are willing to have an opinion on economics but not with physics or a lot of other subjects).

Edit: I should probably mention econometrics, which is basically the application of statistics to testing claims in economics. Sure that's a bit "shady", but as I've mentioned before, economics is complicated, having a "best approximation" of things is better than making wild guesses. One problem is that a lot of "economists" are idiots and shouldn't be calling themselves as such, and hence a lot of the work they do is absolute garbage as they aren't suitably qualified to analyse stuff at a level of rigour that I would consider acceptable with our current knowledge of maths and other subjects, this is also a problem in the natural sciences, but nowhere near as much as with economics and other social sciences.

Edit2: Actually, a fun topic is international economics (which arguably fits into macroeconomics), learn what comparative advantage is and why trade is generally considered good for society as a whole.

I am looking for literature on the subject because those models get mugged by reality real quick. IO in general has moved away from the structure-conduct-performance model, as it is known, because those models never provided a great understanding of the causal relationships, and it didn't take much to actually falsify the original functions. Moreover, at least since Cournot & Bertrand, we know that under some conditions an oligopoly is sufficient for prices to be equal to marginal cost, the same as perfect competition. For more on that see Tirole's Theory of Industrial Organization.

Thank you for the suggestions! I'll look into the Rand Journal asap.

> Handbook of Industrial Organization

I looked up the handbook and there's a few volumes that are out of my price-range. Do you know anything about this book? I was thinking about getting it for the price.