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Working Paper
A computationally efficient characterization of pure strategy Nash equilibria in large entry games
This note presents a simple algorithm for characterizing the set of pure strategy Nash equilibria in a broad class of entry games. The algorithm alleviates much of the computational burden associated with recently developed econometric techniques for estimating payoff functions inferred from entry games with multiple equilibria.
Working Paper
Market structure and market definition: the case of small market banks and thrifts
This paper introduces a simple method to test between two general approaches to defining bank and thrift product markets. I estimate two models that endogenize market structure using data on banks and thrifts from 1,884 rural markets for the year 2000. The first model assumes that banks and thrifts are in "independent product markets," i.e., that bank profitability depends only on competition from other banks and that thrift profitability depends only on competition from other thrifts. An alternative model is then estimated assuming that banks and thrifts are "perfect strategic ...
Conference Paper
Using market structure to assess differentiation between retail depository institutions
We assess the competitive impact that single-market banks and thrift institutions have on multi-market banks (and vice-versa) in 1,884 non-MSA markets. We estimate a model of equilibrium market structure which endogenizes entry for three types: multi-market banks, single-market banks, and thrift institutions. Observed market structures and the solution to an entry-type game identify the parameters of a latent (unobserved) profit function. We find significant evidence of product differentiation ? particularly in the case of thrifts. Furthermore, product differentiation appears to depend upon ...
Conference Paper
Differences across originators iin CMBS loan underwritten
Working Paper
Market structure and competition among retail depository institutions
We assess the competitive impact that single-market banks and thrift institutions have on multi-market banks (and vice-versa) in 1,884 non- MSA markets. We estimate a model of equilibrium market structure which endogenizes entry for three types: multi-market banks, single-market banks, and thrift institutions. Observed market structures and the solution to an entry-type game identify the parameters of a latent (unobserved) profit function. We find significant evidence of product differentiation-- particularly in the case of thrifts. Furthermore, product differentiation appears to depend upon ...
Working Paper
Identifying price discrimination when product menus are endogenous
The standard approach to identifying second degree price discrimination is based on examining correlations between product menus and prices. When product menus are endogenous, however, tests for price discrimination may be biased by the fact that unobservables affecting costs or demand may jointly determine product menus and prices leading one to falsely infer price discrimination. Attempts to correct for this potential bias using observed product characteristics or fixed effects are shown to potentially confound inference on price discrimination leading one to reject it when firms are ...