Industrial Organization: Concepts, Objectives, and Historical Developments

Document Type : Review paper

Author

Department of Applied Economics, Faculty of Economics, University of Tehran, Tehran, Iran.

Abstract

This paper examines the concepts, objectives, and historical evolution of industrial organization. This branch of economics focuses on the study of market structures, firm behavior and performance, and related public policies such as antitrust policies, regulation, and deregulation. The findings of this research indicate that industrial organization has evolved through four historical stages since Adam Smith. In the first stage (1770s–1860s), classical economists introduced concepts such as competition and monopoly and developed the earliest models of competition analysis. In the second stage (1870s to 1920s), with the emergence of neoclassical economics, many analytical tools for studying markets and firm behavior were introduced by economists and mathematicians, and public policy in the areas of competition and monopolies gained significant attention. The third stage (1930s–1970s) was marked by the introduction of the theory of monopolistic competition and the Structure-Conduct-Performance (SCP) analytical framework. Finally, since the 1980s, the New Empirical Industrial Organization (NEIO) has emerged in response to criticisms of the SCP paradigm. This review, by tracing the evolutionary development of industrial organization, provides researchers with valuable insights into the challenges and research opportunities within this field.

Keywords

Main Subjects

References

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Journal of Economic Research (Tahghighat- E- Eghtesadi)
Volume 60, Issue 1
June 2025
Pages 800-857

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  • Receive Date: 06 February 2025
  • Revise Date: 24 February 2025
  • Accept Date: 10 May 2025

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