Author : Maria Ana Vitorino
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)
Book Synopsis Empirical Entry Games with Complementarities by : Maria Ana Vitorino
Download or read book Empirical Entry Games with Complementarities written by Maria Ana Vitorino and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper proposes a strategic model of entry that allows for positive and negative spillovers among firms. The model is applied to a novel dataset containing information about the store configurations of all US regional shopping centers and is used to quantify the magnitude of inter-store spillovers. The author addresses the estimation difficulties that arise due to the presence of multiple equilibria by formulating the entry game as a Mathematical Problem with Equilibrium Constraints (MPEC). While this paper constitutes the first attempt to use this direct optimization approach to address a specific empirical problem, the method can be used in a wide range of structural estimation problems. The empirical results support the agglomeration and clustering theories that predict firms may have incentives to co-locate despite potential business stealing effects. It is shown that the firms' negative and positive strategic effects help predict both how many firms can operate profitably in a given market and the firm-types configurations. The relative magnitude of such effects varies substantially across store-types.