Research in Industrial

First (as noted previously) empirical research in industrial economics has come to employ statistical techniques that allow the analysis of large collection of data. These techniques require the researcher two write down general versions of equations describing structure-conduct-performance relationship. Specific versions of the general equations are the estimated from real-world data to obtain average relationship for the sample. Once researches started to formalize the structure-conduct-performance relationship in terms of equation, it was only a matter of time until attention turned from estimation to the theoretical underpinnings of the models that produced the equation in the first place.
Second, strictly theoretical research in the structure-conduct-performance tradition has responded to the theoretical criticism of the Chicago school. Since of arguments of the Chicago school often made on a strictly theoretical basis, attention has been given to the ways the conclusions of argument change as the underling assumption are changed.
One can argue that if policy recommendations are based on theoretical models, they should receive little weight if the models omit important aspects of the problem with which they are supposed to deal and if the results of analysis depend on these omissions.
This is especially the case if the models are advanced to discredit empirical observations without themselves being tested. The Chicago school does not directly test the assumption that the competitive model can be used to make prediction for the real world, but maintains it as an a priory belief.
A result of the increasingly theoretical nature of structure-conduct-performance research has been a convergence at least in the methodologies of the two schools of thought that debate industrial economics. There is a partial synthesis of results as well. Economists is structure-conduct-performance school are less likely than they once were to assume that the search for or exercise of market power explain observed market product. But they remain unwilling to assume, as does as Chicago school that efficiency is the domain explanation for firm conduct and that government is the primary source of market power.