Social Science Talk

Abstract: Models of market entry feature widely in empirical industrial organization. They allow researchers to explore the nature of market competition in limited data settings. Such models have also served as the canonical example of a "discrete game" in the econometrics literature on games. A limitation of extant methods in this setting is that they scale poorly to environments with more than two or three potential entrants per market. We propose new methods for the empirical analysis of market entry in settings with many potential entrants (e.g., route entry by airlines with dozens of possible carriers). Features of our analysis apply to discrete games more generally.