a1 Ekaterini Kyriazidou is Assistant Professor, Department of Economics, University of Chicago, Chicago, IL 60637.
a2 Martin Pesendorfer is Assistant Professor, Department of Economics, Yale University, New Haven, CT 06520.
We examine the Austro-Hungarian bentwood furniture industry as a case study for modem industrialization during the second half of the nineteenth centuly. We establish that, through the implementation of innovative production methods and aggressive and insightful marketing strategies, this industry constitutes an important example of the modem industrial enterprise. Furthermore, we find evidence of cooperative behavior in the industry, making it an interesting case study in the history of industrial organization.