Economics 8853
Industrial Organization I
Fall 2015
Monday, Wednesday 10:30 - 11:45
Maloney Hall 330
Instructor:
Office:
Office Hours:
Email:
Phone:
Professor Julie Mortimer
332 Maloney Hall
Monday 3.00-4.00pm and by appointment
julie.mortimer.2@bc.edu
617-552-3676
Course Summary
In this course, we study imperfect competition among firms, with an emphasis on
empirical work. We learn how to implement empirical methods commonly used in
Industrial Organization (IO), and how to read, and ultimately write, papers in empirical IO. Topics covered include demand estimation, auctions, price discrimination,
bundling, asymmetric information and adverse selection, vertical control and contractual arrangements, and others as time allows. Each topic will be organized around
recent empirical work. Throughout, we will consider the importance of identification
in empirical studies. There will almost certainly be some important topics (e.g., estimating dynamic models) that we will not have time to cover in detail. I will introduce
these topics through the course readings, and will provide lectures notes to students
who are interested in pushing further on these topics. There is no required text.
However, you should obtain a copy of The Theory of Industrial Organization by Jean
Tirole as a reference for any models that are not familiar to you.
Course Requirements
1. A large portion of the class is discussion-based. You must read the papers announced before each class meeting and participate in the discussion of these papers.
2. One referee report will be assigned. You will need to complete the referee report
along with a cover letter to the editor summarizing your analysis. One goal of the
course is to teach you how to read papers for the purpose of providing constructive
criticism. Thus, this assignment is usually completed after you have had a chance to
read and discuss several papers. I will provide the paper and announce a due date
for the report later in the course.
3. There will be three problem sets assigned. I will also provide you with a “Problem Set 0” to help you become proficient at coding in Matlab or a similar language
before starting the graded problem sets. You may choose whether or not to turn this
1
problem set in. You should expect to spend a lot of time on the problem sets in the
beginning of the semester.
4. Each student will lead one in-class discussion of an empirical paper from the
syllabus in the second half of the semester. Starred (*) papers are eligible for presentation, and you may sort yourselves among papers using any mechanism of your
choosing.
A complete reading list follows the course outline. Papers for which you are expected
to prepare discussion questions are listed separately in the course outline. The current
list is my best expectation of the papers we will cover from the more extensive reading
list that follows, but they may change as we go along.
Course Outline
Week Date
Topic
1
Aug 31
Introduction to Graduate Empirical IO
Lecture Notes
Sep 2
Demand Estimation I
Lecture Notes:
Early Approaches; Vertically-Differentiated Models of Demand
Sep 7
Labor Day (No Meeting)
Sep 9
Application: Vertically-Differentiated Demand
Mortimer (2007)
Sep 14
Demand Estimation II
Lecture Notes:
Logit and Nested-Logit Models of Demand, and Review of GMM
Sep 16
Application: Nested-Logit Demand
Goldberg (1995)
Sep 21
Demand Estimation III
Lecture Notes: Random Coefficients Models of Demand
Sep 23
Applications: Random-Coefficient Logit Demand
Lecture Notes: Automobile Examples
Sep 25
Problem Set 1 Due, 5.00pm
2
3
4
2
Week Date
Topic
5
Sep 28
Guest Lecture: Michael Grubb
Sep 30
Entry Models: Comparisons of Market Structure
Lecture Notes
Oct 5
Entry Models as Discrete Games
Lecture Notes
Oct 7
Moment Inequalities
Lecture Notes
Oct 9
Problem Set 2 Due, 5.00pm
Oct 12
Columbus Day (No Meeting)
Oct 14
Single-Agent Dynamic Optimization Models
Lecture Notes on Rust (1987)
Oct 19
Application: Single-Agent Dynamics
Ackerberg (2003) or other
Oct 21
Retailing and Inventories I
Aguirregabiria (1999)*
Oct 23
Problem Set 3 Due, 5.00pm
Oct 26
Retailing and Inventories II
Hendel and Nevo (2006)*
Oct 28
Retailing and Inventories III: Stock-out Events
Conlon and Mortimer (2012)
Nov 2
U.S. Merger policy
Lecture Notes
Nov 4
No Meeting
Nov 9
Auctions I
Hendricks and Paarsch (1995), Hendricks and Porter (1988), Haile
and Tamer (2003), plus Lecture Notes.
Nov 11
Auctions II (Collusion)
Asker (2010)*
6
7
8
9
10
11
3
Week Date
Topic
12
Nov 16
Network Externalities
Ackerberg and Gowrisankaran (2006)*
Nov 18
Vertical Contracts I
Mortimer (2008)* plus Lecture Notes
Nov 23
Vertical Contracts II
Conlon and Mortimer (2015)*
Nov 25
Thanksgiving Break (No Meeting)
Nov 30
Vertical Bundling
Ho, Ho, and Mortimer (2012)*
Dec 2
Vertical Integration
Crawford et al. (2014)
Dec 7
Health Economics I
Ho (2009)*
Dec 9
Health Economics II
Grennan (2012)*
13
14
15
4
Class Outline References
Ackerberg, D. A. 2003. “Advertising, learning, and consumer choice in experience
good markets: An empirical examination.” International Economic Review 44
(3): 1007–1040.
Ackerberg, D. A., and G. Gowrisankaran. 2006. “Quantifying equilibrium network
externalities in the ACH banking industry.” Rand Journal of Economics 37 (3):
738–761.
Aguirregabiria, V. 1999. “The dynamics of markups and inventories in retailing firms.”
Review of Economic Studies 66 (2): 275–308.
Asker, J. 2010. “A Study of the Internal Organization of a Bidding Cartel.” American
Economic Review 100 (3): 724–762.
Conlon, Christopher T., and Julie Holland Mortimer. 2012. “Demand estimation under incomplete product availability.” http://fmwww.bc.edu/ec-p/WP799.pdf.
. 2015. “Efficiency and Foreclosure Effects of All-Units Discounts: Empirical
Evidence.” https://www2.bc.edu/julie-mortimer-2/cm_rebates14_june.
pdf.
Crawford, Greg, Robin Lee, Michael Whinston, and Ali Yurukoglu. 2014. “The Welfare Effects of Vertical Integration in Multichannel Television Markets.” http:
//www.law.northwestern.edu/research- faculty/searlecenter/events/
antitrust/documents/Yurukoglu_welfare.mainpaper.shared.pdf.
Goldberg, P. K. 1995. “Product differentiation and oligoply in international markets:
The case of the United States automobile industry.” Econometrica 63 (4): 891–
951.
Grennan, Matthew. 2012. “Bargaining ability and price discrimination: Emprical evidence from medical devices.” http://ssrn.com/abstract=1721145.
Haile, P. A., and E. Tamer. 2003. “Inference with an incomplete model of English
auctions.” Journal of Political Economy 111 (1): 1–51.
Hendel, I., and A. Nevo. 2006. “Measuring the implications of sales and consumer
inventory behavior.” Econometrica 74 (6): 1637–1673.
Hendricks, K., and H. J. Paarsch. 1995. “A survey of recent empirical work concerning
auctions.” Canadian Journal of Economics-Revue Canadienne D Economique 28
(2): 403–426.
Hendricks, K., and R. H. Porter. 1988. “An empirical study of an auction with asymmetric information.” American Economic Review 78 (5): 865–883.
Ho, K. 2009. “Insurer-provider networks in the medical care market.” American Economic Review 99 (1): 393–430.
5
Ho, K., J. Ho, and J. H. Mortimer. 2012. “The ese of full-line forcing contracts in the
video rental industry.” American Economic Review 102 (2): 686–719.
Mortimer, J. H. 2007. “Price discrimination, copyright law, and technological innovation: Evidence from the introduction of DVDs.” Quarterly Journal of Economics
122 (3): 1307–1350.
. 2008. “Vertical contracts in the video rental industry.” Review of Economic
Studies 75 (1): 165–199.
Rust, J. 1987. “Optimal replacement of GMC bus engines: An empirical model of
Harold Zurcher.” Econometrica 55 (5): 999–1033.
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References
Auctions
Asker, J. 2010. “A Study of the Internal Organization of a Bidding Cartel.” American
Economic Review 100 (3): 724–762.
Asker, J., and E. Cantillon. 2008. “Properties of scoring auctions.” Rand Journal of
Economics 39 (1): 69–85.
Athey, S., and P. A. Haile. 2002. “Identification of standard auction models.” Econometrica 70 (6): 2107–2140.
Athey, S., and J. Levin. 2001. “Information and competition in US forest service
timber auctions.” Journal of Political Economy 109 (2): 375–417.
Bajari, P., and A. Hortacsu. 2003. “The winner’s curse, reserve prices, and endogenous
entry: empirical insights from eBay auctions.” Rand Journal of Economics 34 (2):
329–355.
Bajari, P., and L. X. Ye. 2003. “Deciding between competition and collusion.” Review
of Economics and Statistics 85 (4): 971–989.
Bajari, Patrick Ludvig. 1997. “The first price sealed bid auction with asymmetric
bidders: Theory and applications.” Ph.D. thesis, University of Minnesota.
Bajari, Patrick Ludvig, and Lixin Ye. 2001. “Competition versus collusion in procurement auctions.” www-siepr.stanford.edu/workp/swp01001.pdf.
Baldwin, L. H., R. C. Marshall, and J. F. Richard. 1997. “Bidder collusion at Forest
Service timber sales.” Journal of Political Economy 105 (4): 657–699.
Cantillon, Estelle, and Martin Pesendorfer. 2007. “Combination bidding in multi-unit
auctions.” http://www.cepr.org/pubs/dps/DP6083.asp.
Guerre, E., I. Perrigne, and Q. Vuong. 2000. “Optimal nonparametric estimation of
first-price auctions.” Econometrica 68 (3): 525–574.
Haile, P. A. 2001. “Auctions with resale markets: An application to US forest service
timber sales.” American Economic Review 91 (3): 399–427.
Haile, P. A., and E. Tamer. 2003. “Inference with an incomplete model of English
auctions.” Journal of Political Economy 111 (1): 1–51.
Haile, Philip A., Han Hong, and Matthew Shum. 2006. “Nonparametric tests for
common values in first-price sealed-bid auctions.” www.econ.yale.edu/~pah29/
npmcv06.pdf.
Hendricks, K., and H. J. Paarsch. 1995. “A survey of recent empirical work concerning
auctions.” Canadian Journal of Economics-Revue Canadienne D Economique 28
(2): 403–426.
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Hendricks, K., J. Pinkse, and R. H. Porter. 2003. “Empirical implications of equilibrium bidding in first-price, symmetric, common value auctions.” Review of
Economic Studies 70 (1): 115–145.
Hendricks, K., and R. H. Porter. 1988. “An empirical study of an auction with asymmetric information.” American Economic Review 78 (5): 865–883.
Hendricks, Ken, and Robert H. Porter. 2007. “An empirical perspective on auctions.”
In Handbook of Industrial Organization III, edited by M. Armstrong and R.
Porter.
Hortacsu, A., and D. McAdams. 2010. “Mechanism choice and strategic bidding in
divisible good auctions: An empirical analysis of the Turkish treasury auction
market.” Journal of Political Economy 118 (5): 833–865.
Jofre-Bonet, M., and M. Pesendorfer. 2003. “Estimation of a dynamic auction game.”
Econometrica 71 (5): 1443–1489.
Kagel, J. H., R. M. Harstad, and D. Levin. 1987. “Information impact and allocation
rules in auctions with affiliated private values: A laboratory study.” Econometrica
55 (6): 1275–1304.
Kagel, John H. 1995. “Auctions: A survey of experimental research.” In The Handbook
of Experimental Economics, edited by John H. Kagel and Alvin E. Roth.
Kastl, J. 2011. “Discrete bids and empirical inference in divisible good auctions.”
Review of Economic Studies 78 (3): 974–1014.
Klemperer, P. 2002. “What really matters in auction design.” Journal of Economic
Perspectives 16 (1): 169–189.
Krasnokutskaya, E. 2011. “Identification and estimation of auction models with unobserved heterogeneity.” Review of Economic Studies 78 (1): 293–327.
Laffont, J. J. 1997. “Game theory and empirical economics: The case of auction data.”
European Economic Review 41 (1): 1–35.
Laffont, J. J., H. Ossard, and Q. Vuong. 1995. “Econometrics of 1st-price auctions.”
Econometrica 63 (4): 953–980.
Li, T., I. Perrigne, and Q. Vuong. 2000. “Conditionally independent private information in OCS wildcat auctions.” Journal of Econometrics 98 (1): 129–161.
. 2002. “Structural estimation of the affiliated private value auction model.”
Rand Journal of Economics 33 (2): 171–193.
Li, T., I. Perrigne, and Q. A. Wong. 2003. “Semiparametric estimation of the optimal
reserve price in first-price auctions.” Journal of Business & Economic Statistics
21 (1): 53–64.
McAdams, D. 2008. “Partial identification and testable restrictions in multi-unit auctions.” Journal of Econometrics 146 (1): 74–85.
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McAfee, R. P., and J. McMillan. 1987. “Auctions and bidding.” Journal of Economic
Literature 25 (2): 699–738.
Milgrom, P. 1989. “Auctions and bidding: A primer.” Journal of Economic Perspectives 3 (3): 3–22.
Milgrom, P. R., and R. J. Weber. 1982. “A theory of auctions and competitive bidding.” Econometrica 50 (5): 1089–1122.
Milgrom, Paul. 2004. Putting Auction Theory to Work. Cambridge University Press.
isbn: 978-0521536721.
Paarsch, H. J. 1992. “Deciding between the command and private value paradigms
in empirical models of auctions.” Journal of Econometrics 51 (1-2): 191–215.
Paarsch, Harry J. 1992. “Empirical models of auctions and an application to British
Columbian timber sales.”
Porter, R. H. 1995. “The role of information in United States offshore oil and gas
lease auctions.” Econometrica 63 (1): 1–27.
Porter, R. H., and J. D. Zona. 1993. “Detection of bid rigging in procurement auctions.” Journal of Political Economy 101 (3): 518–538.
Shneyerov, A. 2006. “An empirical study of auction revenue rankings: the case of
municipal bonds.” Rand Journal of Economics 37 (4): 1005–1022.
Wolak, F. A. 2007. “Quantifying the supply-side benefits from forward contracting
in wholesale electricity markets.” Journal of Applied Econometrics 22 (7): 1179–
1209.
Wolfram, C. D. 1998. “Strategic bidding in a multiunit auction: an empirical analysis
of bids to supply electricity in England and Wales.” Rand Journal of Economics
29 (4): 703–725.
Price Discrimination
Borenstein, S., and N. L. Rose. 1994. “Competition and price dispersion in the United
States airline industry.” Journal of Political Economy 102 (4): 653–683.
Busse, M., and M. Rysman. 2005. “Competition and price discrimination in Yellow
Pages advertising.” Rand Journal of Economics 36 (2): 378–390.
Crawford, G. S. 2008. “The discriminatory incentives to bundle in the cable television
industry.” Quantitative Marketing and Economics 6 (1): 41–78.
Goldberg, P. K. 1996. “Dealer price discrimination in new car purchases: Evidence
from the consumer expenditure survey.” Journal of Political Economy 104 (3):
622–654.
Leslie, P. 2004. “Price discrimination in Broadway theater.” Rand Journal of Economics 35 (3): 520–541.
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McManus, B. 2007. “Nonlinear pricing in an oligopoly market: the case of Specialty
coffee.” Rand Journal of Economics 38 (2): 512–532.
Miravete, E. J. 2002. “Estimating demand for local telephone service with asymmetric
information and optional calling plans.” Review of Economic Studies 69 (4): 943–
971.
. 2003. “Choosing the wrong calling plan? Ignorance and learning.” American
Economic Review 93 (1): 297–310.
Mortimer, J. H. 2007. “Price discrimination, copyright law, and technological innovation: Evidence from the introduction of DVDs.” Quarterly Journal of Economics
122 (3): 1307–1350.
Shepard, A. 1991. “Price discrimination and retail configuration.” SHEPARD, A,
Journal of Political Economy 99 (1): 30–53.
Networks and Network Externalities
Ackerberg, D. A., and G. Gowrisankaran. 2006. “Quantifying equilibrium network
externalities in the ACH banking industry.” Rand Journal of Economics 37 (3):
738–761.
Capps, C., D. Dranove, and M. Satterthwaite. 2003. “Competition and market power
in option demand markets.” Rand Journal of Economics 34 (4): 737–763.
Gandal, N. 1994. “Hedonic price indexes for spreadsheets and an empirical test for
network externalities.” Rand Journal of Economics 25 (1): 160–170.
Gandal, N., M. Kende, and R. Rob. 2000. “The dynamics of technological adoption
in hardware/software systems: the case of compact disc players.” Rand Journal
of Economics 31 (1): 43–61.
Hendel, I., A. Nevo, and F. Ortalo-Magne. 2009. “The relative performance of real estate marketing platforms: MLS versus FSBOMadison.com.” American Economic
Review 99 (5): 1878–1898.
Ho, K. 2009. “Insurer-provider networks in the medical care market.” American Economic Review 99 (1): 393–430.
Rysman, M. 2004. “Competition between networks: A study of the market for yellow
pages.” Review of Economic Studies 71 (2): 483–512.
Bundling
Byzalov, Dmitri. 2010. “Unbundling cable television: An empirical investigation.”
http://astro.temple.edu/~dbyzalov/cable.pdf.
Chu, C. S., P. Leslie, and A. Sorensen. 2011. “Bundle-size pricing as an approximation
to mixed bundling.” American Economic Review 101 (1): 263–303.
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Crawford, G. S., and A. Yurukoglu. 2012. “The welfare effects of bundling in multichannel television markets.” American Economic Review 102 (2): 643–685.
Ho, K., J. Ho, and J. H. Mortimer. 2012. “The ese of full-line forcing contracts in the
video rental industry.” American Economic Review 102 (2): 686–719.
Boundaries of the Firm
Baker, G. P., and T. N. Hubbard. 2003. “Make versus buy in trucking: Asset ownership, job design, and information.” American Economic Review 93 (3): 551–
572.
Hubbard, T. N. 2000. “The demand for monitoring technologies: The case of trucking.” Quarterly Journal of Economics 115 (2): 533–560.
. 2003. “Information, decisions, and productivity: On-board computers and
capacity utilization in trucking.” American Economic Review 93 (4): 1328–1353.
Vertical Control and Contractual Agreements
Ackerberg, D. A., and M. Botticini. 2002. “Endogenous matching and the empirical
determinants of contract form.” Journal of Political Economy 110 (3): 564–591.
Asker, John. 2004. “Measuring cost advantages from exclusive dealing: An empirical
study of beer distribution.” http://faculty.chicagobooth.edu/workshops/
AppliedEcon/archive/pdf/asker.pdf.
Lafontaine, F. 1992. “Agency theory and franchising: Some empirical results.” Rand
Journal of Economics 23 (2): 263–283.
Mortimer, J. H. 2008. “Vertical contracts in the video rental industry.” Review of
Economic Studies 75 (1): 165–199.
Rey, P., and J. Tirole. 1986. “The logic of vertical restraints.” American Economic
Review 76 (5): 921–939.
Slade, M. E. 1996. “Multitask agency and contract choice: An empirical exploration.”
International Economic Review 37 (2): 465–486.
Villas-Boas, S. B. 2007. “Vertical relationships between manufacturers and retailers:
Inference with limited data.” Review of Economic Studies 74 (2): 625–652.
Whinston, M. D. 1990. “Tying, foreclosure, and exclusion.” American Economic Review 80 (4): 837–859.
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Retail and Inventories
Aguirregabiria, V. 1999. “The dynamics of markups and inventories in retailing firms.”
Review of Economic Studies 66 (2): 275–308.
Conlon, Christopher T., and Julie Holland Mortimer. 2012. “Demand estimation under incomplete product availability.” http://fmwww.bc.edu/ec-p/WP799.pdf.
Conlon, Christopher, and Julie Holland Mortimer. 2010. “Effects of product availability: Experimental evidence.” http://fmwww.bc.edu/ec-p/WP798.pdf.
Erdem, T lin, Susumu Imai, and Michael Keane. 2003. “Brand and quantity choice
dynamics under price uncertainty.” Quantitative Marketing and Economics 1 (1):
5–64.
Hendel, I., and A. Nevo. 2006a. “Measuring the implications of sales and consumer
inventory behavior.” Econometrica 74 (6): 1637–1673.
. 2006b. “Sales and consumer inventory.” Rand Journal of Economics 37 (3):
543–561.
Moral Hazard, Asymmetric Information in Insurance Markets
Abbring, Jaap H., Jean Pinquet, and Pierre-André Chiappori. 2003. “Moral hazard and dynamic insurance data.” Journal of the European Economic Association 1 (4): 767–820. http : / / public . econ . duke . edu / ~hf14 / teaching /
socialinsurance/readings/fudan_hsbc/abbring_chiappori_heckman03.
pdf.
Chiappori, P. A., and B. Salanie. 2000. “Testing for asymmetric information in insurance markets.” Journal of Political Economy 108 (1): 56–78.
Chiappori, Pierr-André, and Bernard Salanié. 2002. “Testing contract theory: A survey of some recent work.” http : / / www . cesifo - group . de / portal / page /
portal / DocBase _ Content / WP / WP - CESifo _ Working _ Papers / wp - cesifo 2002/wp-cesifo-2002-06/738.pdf.
Cohen, A., and L. Einav. 2007. “Estimating risk preferences from deductible choice.”
American Economic Review 97 (3): 745–788.
Handel, Benjamin. 2012. “Adverse selection and health insurance markets: When
nudging hurts.” emlab.berkeley.edu/~bhandel/wp/Handel_ASIN_82012.pdf.
Hendel, I., and A. Lizzeri. 2003. “The role of commitment in dynamic contracts:
evidence from life insurance.” Quarterly Journal of Economics 118 (1): 299–327.
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Advertising, Information Disclosure, Provision and Search
Ackerberg, D. A. 2001. “Empirically distinguishing informative and prestige effects
of advertising.” Rand Journal of Economics 32 (2): 316–333.
. 2003. “Advertising, learning, and consumer choice in experience good markets: An empirical examination.” International Economic Review 44 (3): 1007–
1040.
Dranove, D., D. Kessler, M. McClellan, and M. Satterthwaite. 2003. “Is more information better? The effects of ”Report cards” on health care providers.” Journal
of Political Economy 111 (3): 555–588.
Genesove, D. 1993. “Adverse selection in the wholesale used car market.” Journal of
Political Economy 101 (4): 644–665.
Hubbard, T. N. 1998. “An empirical examination of moral hazard in the vehicle
inspection market.” Rand Journal of Economics 29 (2): 406–426.
Jin, G. Z., and P. Leslie. 2003. “The effect of information on product quality: Evidence
from restaurant hygiene grade cards.” Quarterly Journal of Economics 118 (2):
409–451.
Lewis, G. 2011. “Asymmetric information, adverse selection and online disclosure:
The case of eBay Motors.” American Economic Review 101 (4): 1535–1546.
Sorensen, A. T. 2000. “Equilibrium price dispersion in retail markets for prescription
drugs.” Journal of Political Economy 108 (4): 833–850.
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Discussion Questions for All Papers
1. What is the research question?
2. What are the goals of the paper? (Does the paper aim to develop methods,
answer a policy question, test models, or measure an effect?)
3. Why is the paper important according to the author? Is the author right?
4. If the objective is a methodological advance, what is the problem that the
author addresses? Why are existing techniques inadequate? How successful is the
author’s approach? Could we use the approach elsewhere?
5. What is the theoretical foundation for the empirical work? How appropriate is
the model for the applications? How tight is the relationship between the theoretical
and empirical models?
6. For papers using structural empirical models:
• Why does the author use a structural empirical model? Could any of the questions the author asks be addressed with other approaches? What is the source
of identification? Could the model be generalized in any obvious ways?
• Does the structural model seem to capture the key features of the market?
What elements are missing from the model that might be important? Is it clear
what the implications of ignoring these elements are for the estimate the author
obtains?
• Are there overidentifying restrictions of the model that could be tested? Can
you think of alternative models of behavior for the market?
7. For papers not using structural empirical models:
• Why does the author choose this particular model?
• Does the author evaluate the model specification?
• Are the interpretations of the estimates and/or hypothesis tests clear?
• Are there parameters or distributions of interest that one could identify and
estimate by imposing more structure from economic theory?
8. What are the data?
9. What are the key variables in the empirical model?
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10. What is assumed to be exogenous and endogenous? How is the endogeneity
addressed? Do you believe the solutions?
11. What variation in the data does the author rely on for identification of each
element of the empirical model? What assumptions must be true about this variation
for the author’s interpretation of the results to be correct? Are you worried about
any of the assumptions?
12. Does the author make distributional assumptions? If so, are they important
for identification? Does the author evaluate the robustness of the results to the assumption?
13. What are the conclusions of the author?
14. What alternative interpretations are plausible? Does the author test against
any plausible alternatives, or provide any practical reason why they are less likely?
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