not all rivals look alike estimating an equilibrium model of the release date timing game a very serious game of strategy is at work a cross between chess and chicken which studio distribution chiefs play year round but with increasing intensity during the summer and holiday release period new york times december 6 1999 hubris hubris if you only think about your own business you think i ve got a good story department i ve got a good marketing department we re going to go out and do this and you don t think that everybody else is thinking the same way in a given weekend in a year you ll have five movies open and there s certainly not enough people to go around joe roth chairman of walt disney studios answering a question about the large number of major movies opening within days of each other los angeles times december 31 1996 i introduction the number of americans who go to the movies varies dramatically over the course of the year and sometimes more than doubles within a period of two weeks at the same time the first week accounts for almost 40 of the box office revenues of the average movie the combination of these two facts makes the timing of launching a new movie a major focus of attention for distributors of movies with virtually no subsequent price competition the movie s release date is one of the main short run vehicles by which studios compete with each other in this paper i develop and estimate a model of discrete games which allows me to analyze this release date timing game most empirical industry studies focus on price and quantity competition taking other product characteristics as given in many industries however prices play a very small role and competition is channeled through other product attributes the entertainment industry is a prime example competition among movies television programs or broadway shows is on nonmonetary product attributes such as content advertising and time therefore understanding competition in such industries requires a model that endogenizes some of these product attributes especially those that can be changed in the short run this paper provides a framework in which release decisions can be endogenized and nonprice competition can be analyzed the absence of price competition is useful because it allows the focus of the analysis to be on the timing dimension without relying on assumptions about the nature of the postrelease price competition 1 together with the frequent timing decisions associated with different movies this makes the motion picture industry quite attractive for empirical analysis of the timing game this industry however is not the only example in which timing decisions play a central role similar timing considerations are also important in the release decisions of books compact disks and other new products as well as in the scheduling decisions of major events television programs flight schedules and promotional sales 2 when taking on a new project distributors of movies typically plan for a friday release which falls within a relatively short window of time carefully chosen to match the type of the movie this makes the choice of the release date a very discrete one the exact friday within the season is generally determined by a strategic timing game played among distributors before each release season distributors scramble to release their movies on big holiday weekends when demand is high when doing so each distributor tries to release on the attractive holiday weekend and at the same time to deter competitors from doing the same the extent to which distributors are successful in doing so largely depends on the quality of the movies at their disposal and on the way they can compete with movies released by other studios thus modeling this timing game must account for the asymmetries among movies and for the variation in these asymmetries across release seasons specifically i develop and estimate a sequential move game with private information i assume that the observed release date decisions are the equilibrium outcome of such a game

empirical research on discrete choice game theory models of entry an illustration abstract we discuss the empirical implementation of discrete game theoretic models of firm entry after presenting a simple model of entry that underlies much of existing empirical analysis we discuss the major problems that must be tackled when empirically implementing theoretical models and econometric methods used in the literature finally we present results from a reduced form estimation of a sequential move entry game using data from the uk hamburger market

does agricultural extension pay a case study for a new crop lupins in western australia abstract compared to studies evaluating the benefits from agricultural research there are relatively few empirical studies of the net economic benefits of agricultural extension and even fewer that consider both public and private sector extension effort in this study we examine regional differences in the adoption of lupins in western australia wa in order to estimate the net economic benefits of public and private sector extension impacts of extension and other variables on adoption were analysed for 40 shires using multivariate regression analysis the results suggest that both public and private extension activities influenced farmer uptake of lupins particularly by bringing forward the start time of the diffusion curve economic benefits of extension based on the statistical analysis were combined with costs of extension estimated from public sector records and surveys of private sector extension agents and used to estimate the net present value of extension investments by the public and private sectors in the study area

competition and mergers in the retail market for toys i study competition between big box retailers k mart and wal mart and toy retailers kb toys and toys r us with the aim of estimating wal mart s effect on the profits of toy retailers using rece

entry in monopoly market this paper develops new empirical models of market concentration from game theoretic models of entry we construct our models from inequality conditions that describe entrants equilibrium strategies in simultaneous move and sequential move games and use them to study the effects of entry in isolated monopoly markets for new automobiles from estimates of the market size necessary to support one and two dealers we conclude that monopoly dealers do not block the entry of a second dealer we also find that entry does not cause price cost margins to fall by much

a survey of recent empirical work concerning auctions in this paper the authors survey some recent empirical work concerning auctions first outlining two complementary approaches to the empirical analysis of auctions and then discussing several recent developments in the econometric analysis of field data concerning auctions

technology change as a policy response to promote changes in land management for environmental benefits a previous study developed a framework for choosing among groups of policy mechanisms for encouraging environmentally beneficial land use change the framework highlights that these choices should depend on the relative levels of private or internal net benefits and public or external net benefits incentive based mechanisms polluter pays and or beneficiary pays and extension need to be targeted carefully to appropriate projects where private net benefits are close to zero and or public net benefits are more extremely positive or negative this article focuses on policy mechanisms that alter the net benefits of changing land management including r d to develop new technologies and training to improve the skill of landholders at using existing technologies these policy options are now treated more comprehensively within the public benefits private benefits framework benefits of technology change projects can include reductions in the opportunity cost of compliance with environmental programs increases in the public benefits of a particular type of land use change or improvements in private net benefits resulting in public benefits through greater or more rapid adoption by private landholders from an environmental management perspective technology development is most relevant where public net benefits of land use change are positive and private net benefits are negative but not highly negative there is a set of projects for which technology change is the only viable alternative to no action highlighting the importance of technology change in these cases

the effect of ownership structure on prices in geographically differentiated industries i analyze how ownership structure and market geography jointly influence fast food prices i estimate a model of demand and supply that accounts for the market geography and run counterfactual experiments that demonstrate how mergers affect prices i find that the impact of mergers can be large that this impact decreases as the merging outlets are farther apart that mergers among market leaders generally increase prices more than mergers among weaker firms and that mergers can increase prices even if the outlets are so far apart that neither outleti s presence affects prices at the other before the merger

public benefits private benefits and policy mechanism choice for land use change for environmental benefits the choice of policy mechanisms for encouraging environmentally beneficial land use change should depend on the relative levels of private or internal net benefits and public or external net benefits a map of recommended policy mechanisms is developed depending on the relative levels of these variables positive incentives negative incentives and extension need to be targeted carefully to appropriate projects where private net benefits are closer to zero and or public net benefits are more extremely positive or negative technology development is suggested where private net costs outweigh public net benefits no action is recommended for many potential projects

the dynamic spillovers of entry an application to the generic drug industry this paper examines whether experience from entry in one market can potentially enhance profitability at a future market opportunity for a related product we formulate and estimate a dynamic game of entry in which forward looking firms make decisions not just based on present benefits of past entry but also anticipating potential future benefits of current entry dynamic spillovers of entry are incorporated through a firm specific unobservable to the researcher cost that depends on past entry decisions the unobserved costs may also be serially persistent thus the model allows for firm specific unobserved heterogeneity that evolves based on firm actions the challenge of estimating a dynamic game with serially correlated unobserved state variables subject to endogenous feedback is overcome by embedding a particle filter based technique in a nested fixed point algorithm using an application to a stylized model of entry in the generic pharmaceutical industry we underscore the motivation for the model specification and the methodology developed our estimates imply positive spillover effects of entry moreover these spillovers suggest heterogeneity not just across firms but also within firms over time based on their history of entry decisions our results illustrate that entry may potentially provide firms with additional strategic advantage in later markets and that entry spillovers may be an important factor to consider in the equilibrium evolution of the generic drug industry the web appendix is available at https doi org 10 1287 mnsc 2016 2648 this paper was accepted by j miguel villas boas marketing

estimating spatial differences in the brazilian cost of living with household location choices abstract this paper uses a model of optimal household residential decisions to construct a comprehensive true spatial cost of living index with readily available brazilian census data we find evidence of a decreasing or u shaped relationship differing with education level and region between the cost of living and urbanization suggesting that both market disintegration and congestion play roles in raising costs controlling for spatial differences in the cost of living is shown to have important consequences for the determinants of poverty and contrary to many previous results to increase income inequality

estimation of a model of entry in the airline industry this paper considers the effect of an airline s scale of operation at an airport on the profitability of routes flown out of that airport the empirical methodology uses the entry decisions of airlines as indicators of underlying profitability the results extend the empirical literature on airport presence by providing a new set of estimates of the determinants of city pair profitability these estimates imply that city pair profits increase in airport presence and decrease rapidly in the number of entering firms the literature on empirical models of oligopoly entry is also extended via a focus on the role of differences between firms

bid preference programs and participation in highway procurement auctions we use data from highway procurement auctions subject to california s small business preference program to study the effect of bid preferences on auction outcomes our analysis is based on an estimated model of firms bidding and participation decisions which allows us to evaluate the effects of current and alternative policy designs we show that incorporating participation responses significantly alters the assessment of preferential treatment policies

an empirical model of firm entry with endogenous product type choices i describe a model of entry with endogenous product type choices these choices are formalized as the outcomes of a game of incomplete information in which rivals differentiated products have nonuniform competitive effects on profits i estimate the model for location choices in the video retail industry using a nested fixed point algorithm solution the results imply significant returns to product differentiation simulations illustrate the tradeoff between demand and intensified competition and the extent to which markets with more scope for differentiation support greater entry

product positioning and competition the role of location in the fast food industry this paper examines optimal product positioning strategies of asymmetric firms in the context of retail outlet locations in the fast food industry the relationships between profits and product differentiation reveal that both mcdonald s and burger king are better off avoiding close competition if the market area is large enough however in small market areas mcdonald s would prefer to be located together with burger king rather than have the two outlets be only a slight distance apart in contrast burger king s profits always increase with greater differentiation offsetting these incentives is the desirability of locating centrally to appeal to the most customers the equilibrium depends on the market s size in small markets mcdonald s locates near the center of the market and burger king locates to the side of the market in larger markets mcdonald s and burger king choose locations on opposite sides of the market although mcdonald s locates closer to the optimal central location than burger king i also show that the role of price competition on product positioning is fundamentally different under asymmetric competition than under symmetric competition price competition unambiguously induces symmetric firms toward differentiation in contrast with asymmetric firms price competition shifts burger king s incentives toward locating closer to mcdonald s even while price competition increases mcdonald s desire for differentiation as a result equilibrium locations with asymmetric firms are approximately the same regardless of whether prices adjust with location

improving environmental decisions a transaction costs story abstract a multidisciplinary team of researchers made efforts to influence the design and implementation of environmental policy in australia a focus of these efforts was the development of the investment framework for environmental resources inffer in addition the team undertook a range of communication activities training user support and participation in committees and enquiries transaction costs were relevant to these efforts in a variety of ways environmental managers perceived inffer to involve relatively high transaction costs a balance was struck between the system having simplicity and low transaction costs and delivering environmental benefits transaction costs were factored into the planning and prioritisation processes developed for example public and private transaction costs are accounted for in the calculation of benefit cost ratios and in the choice of policy mechanisms there are diverse roles that transaction costs play in the processes of developing implementing and influencing environmental policy programmes a key observation is that appropriate strategic investment in transaction costs can improve decisions and increase net benefits from an environmental programme a well designed decision process can involve incurring transaction costs at one stage in order to save transaction costs at a later stage

public monopoly and economic efficiency evidence from the pennsylvania liquor control board s entry decisions we estimate a spatial model of liquor demand to analyze the impact of government controlled retailing on entry patterns in the absence of the pennsylvania liquor control board the state would have roughly 2 5 times the current number of stores higher consumer surplus and lower payments to liquor store employees with just over half the number of stores that would maximize welfare the government system is instead best rationalized as profit maximization with profit sharing government operation mitigates but does not eliminate free entry s bias against rural consumers we find only limited evidence of political influence on entry jel d42 d72 l11 l12 l43 l81

excess liquidity inflation and the yuan appreciation what can china learn from recent history this paper analyses the issues of excess liquidity inflation and the exchange rate appreciation currently evolving in china in mapping the co movement between excess liquidity and inflation and developing a dynamic model the paper shows that excess liqu idity ignited by dramatic capital inflows is a significant driver for consumer price inflation in china during the last decade in addition the article compares the dynamic paths of inflation and interest rates between china and the united states and reveals marked changes in their differ entials over recent years associating these findings with the evolving appreciation of the yuan against the dollar the paper a dvises a slowdown in the rate of rmb appreciation instead of quick appreciation the paper proposes more flexibility in the rmb exchange rate regime combined with alternative capital control measures to rein in excess liquidity and curb ongoing inflation in china

policy mechanism choice for environmental management by non commercial lifestyle rural landholders abstract for some environmental assets in rural areas the landholders who are having the biggest impact are people with small holdings and an emphasis on lifestyle rather than commercial gains from their land this paper aims to better understand the motivations and likely responses to policy for lifestyle landholders in australia in order to assess which policy mechanisms if any are likely to be most efficiently used to influence their land management through face to face interviews we find that lifestyle landholders have important differences from commercial farmers including much smaller properties a stronger interest in environmental outcomes a lack of land management skills and a lack of time for land management activities from the perspective of environmental policy programs engaging with lifestyle landholders is likely to involve higher transaction costs and there are likely to be higher learning and transition costs per unit area a framework for selection of policy tools is modified to take account of these findings it is concluded that the prospects for worthwhile public investments in land use changes by lifestyle landholders are lower than for commercial landholders

spatial price competition a semiparametric approach we investigate the nature of price competition among firms that produce differentiated products and compete in markets that are limited in extent we propose an instrumental variables series estimator for the matrix of cross price response coefficients demonstrate that our estimator is consistent and derive its asymptotic distribution our semiparametric approach allows us to discriminate among models of global competition in which all products compete with all others and local competition in which products compete only with their neighbors we apply our semiparametric estimator to data from u s wholesale gasoline markets and find that in this market competition is highly localized

the costs of free entry an empirical study of real estate agents in greater boston this paper studies the consequences of xed commissions and low entry barriers in greater boston s real estate brokerage industry from 1998 2007 a period with substantial agent turnover we nd that entry is not associated with increased sales probabilities or reduced sales time instead it decreases the market share of experienced agents and reduces average service quality we develop a dynamic empirical model motivated by these patterns to study the extent of ineciency in the current system compared to alternatives to accommodate a large state space we approximate the value function using sieves and impose the bellman equation as an equilibrium constraint if commissions are cut in half there would be 40 fewer agents implying social savings of 23 of industry revenue and the average agent would facilitate 73 more transactions house price appreciation of 50 during our sample period accounts for a 24 increase in the number of agents and a 31 decline in average agent productivity finally improving information about past agent performance can increase productivity and generate signicant social savings

a dynamic model of entry and exit in a growing industry the potential demand in a new industry evolves over time demand is initially low but advertising by the industry s early entrants can speed up demand growth however there is intrinsic uncertainty of the demand level in each period and uncertainty of the demand evolution path which can be affected by the underlying economic environment we construct a dynamic model that features the stochastically and endogenously expanding demand of a new industry and we investigate the optimal entry and exit behavior of firms as the industry evolves we find that firms incentive to enter early depends critically on the cost that early entrants have to pay in developing the market when the cost is high and the benefit spills over to potential entrants firms have an incentive to wait and the probability of entry can increase with the number of incumbents under certain circumstances firms entry strategy is also influenced by the transition of economic states firms are more likely to enter under a state that shows the prospect of demand taking off soon we also find that in the early stage of an industry higher demand uncertainty can induce faster entry