Walk or wait?: An empirical analysis of street crossing decisions

We examine the behaviour of pedestrians wishing to cross a stream of trasffic at signalized intersections. We model each padestrian as making a desccrete crossing choice by comparing the gaps between vehicles in traffic to an individual-specific "critical gap" that characterizes the individual's minimal acceptable gap. We propose both parametric and nonparametric approaches to estimate the distribution of critical gaps in the population of pedestrians. To estimate the model, we gather field data on crossing decisions and vehicle flows at three intersections in New Delhi. The estimates provide information about heterogeneity in critical gaps across pedestrians and intersections and permits simulation of the effect of changes in traffic light sequence (flows)on pedestran crossing behavior and waiting times.

How Sales Taxes Affect Customer and Firm Behavior: The Role of Search on the Internet

When a multichannel retailer opens its first retail store in a state, the firm is obligated to collect sales taxes on all Internet and catalog orders shipped to that state. This article assesses how opening a store affects Internet and catalog demand. The authors analyze purchase behavior among customers who live far from the retail store but must now pay sales taxes on catalog and Internet purchases. A comparable group of customers in a neighboring state serves as a control. The results show that Internet sales decrease significantly, but catalog sales are unaffected. Further investigation indicates that the difference in these outcomes is partly attributable to the ease with which customers can search for lower prices at competing retailers. The authors extend the analysis to a panel of multichannel firms and show that retailers that earn a large proportion of their revenue from direct channels avoid opening a first store in high-tax states. They conclude that current U.S. sales taxes laws have significant effects on both customer and firm behavior

Predicting the impact of upstream mergers on downstream markets with an application to the retail gasoline industry

This paper presents an empirical model of oligopolistic supply and demand that reflects divisions between downstream retailers and upstream suppliers in order to evaluate the potential effects of upstream mergers. The demand model allows for downstream product differentiation, while the supply model allows upstream firms to inherit market power from their affiliated retailers. The supply and demand models are jointly estimated using data on the retail gasoline industry for the Hawaiian islands in the 1990s. A number of hypothetical upstream mergers in the Hawaiian retail gasoline industry are simulated to evaluate the effects of the mergers on market outcomes and welfare. Various scenarios with post-merger cost savings are also considered.Upstream and downstream competition Merger analysis Differentiated products oligopoly Retail gasoline industry Petroleum industry

Market Structure and Competition in the Retail Discount Industry

This article examines competition among Wal-Mart, Kmart, and Target using two distinct but related approaches. The authors first develop and estimate a discrete game in which each chain's store presence and format decisions in local markets depend on the decisions of its competitors and market characteristics. This analysis is extended to evaluate the determinants of store revenues for each chain in local markets as a function of market characteristics, including the presence of competing firms. These regressions use the results of the initial model to correct for the endogeneity of observed market structures. The results from both exercises illustrate several important asymmetries across the firms. Kmart and Wal-Mart prefer similar markets, but Wal-Mart's competitive position is dominant enough to prevent Kmart's operation in otherwise attractive markets. In contrast, Target prefers substantially different market characteristics. In total, the results support a view of the industry as one in which Wal-Mart is dominant, Target serves more of a niche role, and Kmart struggles to find its footing. </jats:p

PRICES AND ENDOGENOUS MARKET STRUCTURE IN OFFICE SUPPLY SUPERSTORES -super-*

We consider the relationship between prices and market structure for office supply superstores in the U.S. which was central to the Federal Trade Commission's opposition to the merger of Staples and Office Depot. Due to potential biases in a standard regression, we employ a two-stage approach in which a model of endogenous market structure provides correction terms for a second stage price regression. Using a cross-section of data on market structures and Staples' prices, we find that excluding the correction term substantially distorts the importance of competitors as the two-stage model yields stronger negative relationships between prices and market structure variables. Copyright 2008 The Authors.

How Far for a Buck? Tax Differences and the Location of Retail Gasoline Activity in Southeast Chicagoland

We exploit variation in gasoline and cigarettes taxes in adjacent political jurisdictions for northern Illinois and Indiana to examine consumers' trade-off between prices and travel. We develop a model that relates activity in the retail gasoline industry around the tax borders to consumer locations. Our results indicate that the willingness of a typical Chicagoland consumer to travel an additional mile to buy gasoline corresponds to about $0.065 to$0.084 per gallon. According to our estimates, the observed area of Chicago, the jurisdiction with the highest taxes, is missing approximately 40% of the capacity that would exist were taxes equalized. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.