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Sabina Buczkowska edited If_you_wait_to_do__.tex
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Commit id: 38672c5405c8c531256cc4ecfaa07c4122e97266
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3)
In the third chapter we further enhance the literature on the location choices, this time incorporating strategic interactions among establishments.
%In spite of recognizing the importance of incorporating spatial effects in establishments location decision processes, the literature is still scarce on previous attempts.
enhancing and extending the existing literature in a number of ways:
We shed light on strategic interactions, fundamental in establishments’ location choices, yet largely unheeded in the empirical literature. If establishments acted in isolation, it would be a relatively simple matter to adapt existing discrete-choice models. Yet, being non-strategic means that a firm ignores other players’ decisions. Less is known about how to correctly adapt location choice models to study establishments’ discrete choices when they are interrelated. In very sparse empirical applications, when locational choice models are developed for several activity sectors, each of the model is typically run independently.
We incorporate strategic interactions among establishments.
... What makes these discrete choices particularly interesting and challenging to analyze is
that decisions of a particular establishment are interrelated with choices of the others because an establishment accounts for the
key motivation actions of
other agents when making its own decisions (Draganska et al., 2008). These thorny problems posed by the
third chapter. We shed light on strategic interactions, fundamental in establishments’ interdependence of decisions generally cannot be assumed away, without altering the realism of the model of establishment decision making (Berry and Reiss, 2007). The conventional approaches to location
choices, yet largely unheeded in selection, i.e., traditional theory and methods, fail (Thill, 1997) by providing only a set of systematic steps for problem-solving without considering strategic interactions between the
empirical literature. If establishments
acted in
isolation, it would be a relatively simple matter to adapt existing discrete-choice models. Yet, being the market. Being non-strategic
means would mean that
a firm an establishment ignores other players’
decisions. Less is known about how to correctly adapt decisions (Toivanen and Waterson, 2005). A properly specified model of simultaneous entry or location
choice models decisions needs to
study establishments’ discrete choices when they are interrelated. In very sparse empirical applications, when locational choice models are developed for several activity sectors, each recognize this interdependence of
the model is typically run independently. profits (Berry and Reiss, 2007).
There is a need for more realistic studies of complex establishment’s decision-making processes. Even though the computational burden imposed by these models considering strategic interactions is relatively high, it seems that the costs imposed are more than offset by the benefits that accumulate/accrue (Draganska et al., 2008).
Strategic interactions have been largely unsung in the empirical analyses since the year 1929 when Hotelling (1929) brought the discussion in the industrial organization literature. Most of the papers are less than a decade old (Bajari et al., 2013). This literature is in its infancy, in part, due to the complexity of expressions for the probabilities used in the models which increases 45 along with the number of locations and establishment types (Draganska et al., 2008).
We estimate a static discrete game of incomplete information to obtain a Bayesian Nash Equilibrium at the group level using data at the aggregate level. We permit asymmetries across establishment types in the impact of interaction effects and exogenous market characteristics. We develop one location choice model which embraces seven individual models for seven establishment types run simultaneously to account for interactions from all the types on each other.
Less is known about how to correctly adapt location choice models to study establishments' discrete choices when they are interrelated.
What makes these discrete choices particularly interesting and challenging to analyze is that decisions of a particular establishment are interrelated with choices of the others because an establishment accounts for the actions of other agents when making its own decisions (Draganska et al., 2008). These thorny problems posed by the interdependence of decisions generally cannot be assumed away, without altering the realism of the model of establishment decision making (Berry and Reiss, 2007). The conventional approaches to location selection, i.e., traditional theory and methods, fail (Thill, 1997) by providing only a set of systematic steps for problem-solving without considering strategic interactions between the establishments in the market. Being non-strategic would mean that an establishment ignores other players’ decisions (Toivanen and Waterson, 2005). A properly specified model of simultaneous entry or location decisions needs to recognize this interdependence of
profits (Berry and Reiss, 2007).
There is a need for more realistic studies of complex establishment’s decision-making processes. Even though the computational burden imposed by these models considering strategic interactions is relatively high, it seems that the costs imposed are more than offset by the benefits that accumulate/accrue (Draganska et al., 2008).
4) The motivation of the last chapter comes from the fact that most previous discussion on locational decisions has one common feature of making unrealistic and restrictive assumptions and perceives the industry in terms of independent stores.
4) We