Methodology

Research in the structure-conduct-performance tradition has always had a strongly empirical flavor. In the early post-World, War II Period, research was dominated by studies of single industries. Later work employed statistical techniques to determine the average relationship between various structural and conduct elements and performance (especially profitability) over many industries.

This empirical approach was not accidental. If reflected a belief that a more abstract approach although useful in defining important question, would not be of much help in generating answers to those questions:

It would no doubt be extremely convenient if economists new the shape of individual demand and cost curves and could proceed forthwith, by comparisons of price and marginal cost, to conclusions regarding the existing degree of monopoly power. The extent to which monopoly theorist, however, refrain from an empirical application of their formulae is rather striking. The alternative, if more pedestrian, route follows the direction of ascertainable facts and makes use only of empirically applicable concepts.

Historically, the methodology of the structure-conduct-performance approach has consisted of drawing general proposition from empirical observations, this practice contrasts sharply  with the methodological approach of the second major school of industrial economics, which has emphasized theory as the foundation of industrial analysis.