Very simple markov-perfect industry dynamics: Empirics

Arbeitspapier

This paper develops an econometric model of firm entry, competition, and exit in oligopolistic markets. The model has an essentially unique symmetric Markov-perfect equilibrium, which can be computed very quickly. We show that its primitives are identified from market-level data on the number of active firms and demand shifters, and we implement a nested fixed point procedure for its estimation. Estimates from County Business Patterns data on U.S. local cinema markets point to tough local competition. Sunk costs make the industry's transition following a permanent demand shock last 10 to 15 years.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Paper ; No. 2018-17

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities ; Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
• Thema: demand uncertainty ; dynamic oligopoly ; firm entry and exit ; nested fixed point estimator ; sunk costs ; toughness of competition ; counterfactual policy analysis

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Abbring, Jaap H. ; Campbell, Jeffrey R. ; Tilly, Jan ; Yang, Nan
• Ereignis: Veröffentlichung
• (wer): Federal Reserve Bank of Chicago
• (wo): Chicago, IL
• (wann): 2018

Weitere Informationen

• DOI: doi:10.21033/wp-2018-17
• Handle: http://hdl.handle.net/10419/200587
• Letzte Aktualisierung: 10.03.2025, 11:41 MEZ