Estimating Discrete Games with Many Firms and Many Decisions: An Application to Merger and Product Variety

• 成果类型: Article
• 署名作者: Fan, Ying; Yang, Chenyu
• 署名单位: University of Michigan System; University of Michigan; National Bureau of Economic Research; University System of Maryland; University of Maryland College Park
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/734724
• 发表日期: 2025
• 页码: 1886-1931
• 关键词: horizontal mergers; moment inequalities; entry; identification; MODEL; consolidation; efficiencies; COMPETITION; inference

摘要

This paper presents a method for estimating discrete games based on bounds of conditional choice probabilities. The bounds are probabilities that an action is dominant and that it is not dominated. Because the bounds are easy to compute, our method is scalable to models with many firms and discrete decisions. We apply the method to study the effects of a hypothetical merger on firm entry and product variety in local retail craft beer markets in California. We find that the merger induces firm entry. The net effect on product variety is ambiguous once a fixed cost efficiency is taken into account.