Collard-Wexler Brings IO Expertise to Duke Economics

05 December 2014 1:54PM

Professor Allan Collard-Wexler’s familiarity with the steel, concrete, and newspaper industries may seem unusually diverse to some, but for an industrial organization (IO) economist, it is par for the course. Collard-Wexler is a jack-of-all-trades in a field that necessitates knowledge about particular industries and their respective markets.

The new professor joined the Department of Economics in August, and his addition as a member of the faculty has reinforced the department’s strength in empirical IO. Collard-Wexler’s passion for the field is perhaps the product of his background – he hails from a family of social scientists – and his keen interest in the way things work.

“I liked computers (as a kid) because I could get a little machine to work and perform a task,” Collard-Wexler said. “Part of the same thing I like about economics is the modeling approach: Let’s make a little toy to figure out how something works. You start out with something simple and you add pieces to it. In contrast to other social sciences, modeling is an easier way to construct little bits of reality to see what comes out of them.”

According to Collard-Wexler, it’s these “little bits of reality” that make IO substantive. IO economists work with “quasi case studies” to study how markets are organized and how they operate. “By the time you wheel in the model and bring in the data, you have a very real grasp of that specific market,” he said. You can trust the conclusions a little bit more because they’re tethered to something more tangible.”

His area of interest lies in determining why firms in specific markets are structured in a particular way, and why firms with different levels of productivity might exist in the same market – think mom-and-pop shops and huge conglomerates. “People like small firms, but the problem is most of the time the big firms are big because they do something particularly well, and that’s important to keep in mind.”

More broadly, Collard-Wexler said this type of research facilitates an understanding of participants in a market and how changes in an economy are going to alter their behaviors and practices.

“The main message of a lot of this kind of work on productivity is that being able to move resources to the more efficient parts of the economy is really important,” he said. “It shifts the line of thinking. So instead of worrying about how we can get a less productive firm to be more efficient, we now ask how we can get the most efficient firms to take over the market.”

Collard-Wexler previously taught at New York University’s Stern School of Business and was a Donald Harrington Faculty Fellow at the University of Texas at Austin. He was drawn to Duke because of the economics department’s academic environment.

“About half the department does applied structural microeconomics, using economic models to understand microeconomic questions,” he said. “There’s this enormous community of people who are in different fields but use the same tools and have the same mindset.”

For Collard-Wexler, that sense of community extends not only to his faculty colleagues but his Ph.D. students as well. Over the years, he said he has learned a lot from each of his doctoral students, and he hopes to continue doing so at Duke.

“Working with Ph.D. students at a top economics department, you really get to interact with people who will be shaping the field in the future. It’s a long-term interaction in a way that most other types of teaching aren’t,” he said. “The interaction with Ph.D. students is more collegial at Duke Economics than in most other institutions I can think of.”

Beyond fostering important relationships between faculty and students, Collard-Wexler noted that the available resources – census data access, computational resources, and plentiful RAs – prime the department to “push microeconomic work forward in a way that very few departments are.” 

Learn more about Professor Collard-Wexler at his profile page.