Industrial Organization.

• Position: Bureau News - Papers discussed at the February 7 and 8, 2003 National Bureau of Economic Research meeting

The NBER's Program on Industrial Organization met at the Bureau's California Office on February 7 and 8 Dennis W Carlton and Austan Goolsbee, both of NBER and University of Chicago, organized the program meeting, at which these papers were discussed:

Shane Greenstein, NBER and Northwestern University, and Michael Mazzeo, Northwestern University, "Differentiation Strategy and Market Deregulation: Local Telecommunication Entry in the Late 1990s" Discussant: Glenn Woroch, University of California, Berkeley

Steven Berry, NBER and Yale University, and Joel Waldfogel, NBER and University of Pennsylvania, "Product Quality and Market Size" Discussant: Tim Bresnahan, NBER and Stanford University

Gustavo E. Bamberger and Lynette R. Neumann, Lexecon, and Dennis W. Carlton, "An Empirical Investigation of the Competitive Effects of Domestic Airline Alliances" Discussant: Severin Borenstein, NBER and University of California, Berkeley

Amil Petrin, NBER and University of Chicago, and Kenneth Train, University of California, Berkeley, "Omitted Product Attributes in Discrete Choice Models" Discussant: Frank Wolak, NBER and Stanford University

All Hortacsu and Chad Syverson, University of Chicago, "Search Costs, Product Differentiation, and the Welfare Impact of Entry: A Case Study of S & P 500 Index Funds" Discussant: Alan Sorenson, NBER and Stanford University

Luis Garicano, University of Chicago, and Thomas Hubbard, NBER and University of Chicago, "Specialization, Firms, and Markets: The Division of Labor Within and Between Law Firms" Discussant: Jonathan Levin, Stanford University

Toshi Iizuka, Vanderbilt University, and Ginger Z. Jin, University of Maryland, "The Effects of Direct to Consumer Advertising in the Prescription Drug Market" Discussant: Scott Stern, NBER and Northwestern University

Greenstein and Mazzeo examine the role of differentiation strategies in the development of markets for local telecommunication services in the late 1990s. The prior literature has used models of interaction among homogenous firms, but this paper is motivated by the claim that entrants differ substantially in their product offerings and business strategies. Exploiting a new, detailed dataset of CLEC (Competitive Local Exchange Carriers) entry into over 700 U.S. cities, the authors take advantage of recent developments in the analysis of entry and competition among differentiated firms. They find strong evidence that CLECs take account of both potential market...