Estimating a War of Attrition: The Case of the US Movie Theater Industry

• 成果类型: Article
• 署名作者: Takahashi, Yuya
• 署名单位: Johns Hopkins University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20110701
• 发表日期: 2015
• 页码: 2204-2241
• 关键词: declining industries; dynamic-games; free entry; EXIT; equilibria; FRAMEWORK; oligopoly; models; CHOICE

摘要

This paper empirically studies firm's strategic exit decisions in an environment where demand is declining. Specifically, I quantify the extent to which the exit process generated by firms' strategic interactions deviates from the outcome that maximizes industry profits. I develop and estimate a dynamic exit game using data from the US movie theater industry in the 1950s, when the industry faced demand declines. Using the estimated model, I quantify the magnitude of strategic delays and find that strategic interactions cause an average delay of exit of 2.7 years. I calculate the relative importance of several components of these strategic delays. (JEL D92, L11, L82, N72)