Industry Structure, Strategy, and Public Policy. F. M. Scherer. New York: Harper-
Collins College Publishers, 1996, 436 pages.
By his own reckoning, Scherer has been studying phenomena in industrial orga-
nization for nearly four decades. During this time he has established impeccable
credentials and it is no exaggeration to say that he has shaped much of what IO
scholars “know” today. His scholarly work includes many classics – theoretical,
empirical and policy studies. His 1970 textbook (or a subsequent edition of it)
is familiar to all IO scholars. Scherer’s reputation will certainly increase interest
in Industry Structure, Strategy, and Public Policy, a set of nine industry studies
intended for use in undergraduate IO courses. The book is likely to be regarded
by many instructors as a close substitute for The Structure of American Industry,
studies prepared by a variety of scholars and edited by Walter Adams and James
In the preface, Scherer recalls that he began using case studies in his own
undergraduate course in 1971 to avoid regurgitating the material in his then-new
textbook. Like many of us who teach the IO course, Scherer has found the case
study approach – a blending of history, theory and policy – to be the most engaging
way of presenting the subject. The overall plan of this book reminds me of Case
Studies in American Industry, a book written thirty years ago by Leonard Weiss.
Weiss also sought to make theory more “relevant” by blending its presentation with
history and policy, but he dealt with just ﬁve industries, not nine. Few people have
the breadth of knowledge and experience to singlehandedly undertake a project as
large as this and do it well.
In the course of his career, Scherer has become very familiar with the nine
industries in this set. The studies are greatly enriched by the experience he is
able to bring to bear. The industries examined include two commodities (crude oil
and grain), three nondurable goods (beer, pharmaceuticals and petroleum reﬁning)
and four durable goods (automobiles, computers, semiconductors and steel). In
preparing these studies, Scherer assumed that the students who read them will
have had at least one good microeconomics course. He assumed little or no prior
exposureto IO, however, and begins with a short introductory chapter describingthe
structure-conduct-performance paradigm. The studies illustrate the concepts and
relationships that are discussed in most IO courses. Some of these are dealt with in
a number of contexts. As one might expect, issues involving technological change,
scale economies, pricing strategies and international trade surface repeatedly.
The studies are essentially self-contained. Each provides a sufﬁcient amount
of historical background to enable the reader to understand the interplay between
structure, strategy and policy in that industry. Each presents sufﬁcient documen-
tation to support the claims that are made. All of the studies are well written, as
anyone familiar with Scherer’s work would expect. The studies do vary quite a bit
in length, from just over 30 pages to nearly 60 pages. While I regard them as quite
rich in detail, most undergraduates will probably regard them as a bit too long.