Estimating a War of Attrition: The Case of the U.S. Movie Theater Industry

This paper provides a tractable empirical framework to analyze firm behavior in a dynamic oligopoly when demand is declining over time. I modify Fudenberg and Tirole (1986).s model of exit in a duopoly with incomplete information to a model that can be used in an oligopoly, and combine this with an auxiliary entry model to address the initial conditions problem. I estimate this model with panel data on the U.S. movie theater industry from 1949 to 1955, using variations in TV diffusion rates across households, market structure before the exit game starts, and other market characteristics to identify the parameters in the theater’s payoff function and the distribution of unobservable fixed costs. Using the estimated model, I measure strategic delays in the exit process due to oligopolistic competition and incomplete information. The delay in exit that arises from strategic interaction is 2.7 years on average. Out of these years, 3.7% of this delay is accounted for by incomplete information, while the remaining 96.3% is explained by oligopolistic competition

A Semiparametric Test of Agent's Information Sets for Games of Incomplete Information

We propose semiparametric tests of misspecification of agent's information for games of incomplete information. The tests use the intuition that the opponent's choices should not predict a player's choice conditional on the proposed information available to the player. The tests are designed to check against some commonly used null hypotheses (Bajari et al. (2010), Aradillas-Lopez (2010)). We show that our tests have power to discriminate between common alternatives even in small samples. We apply our tests to data on entry in the US airline industry. Both the assumptions of independent and correlated private shocks are not supported by the data

Technological Progress, On-the-Job Search, and Unemployment

This paper studies the impact of long-run productivity growth on job finding and separation rates, and thus the unemployment rate, using a search and matching model. We incorporate disembodied technological progress and on-the-job search into the endogenous job separation model of Mortensen and Pissarides (1994). The incorporation of on-the-job search allows faster growth to reduce unemployment by decreasing the separation rate and inducing job creation. We demonstrate that introducing on-the-job search substantially improves the ability of the Mortensen and Pissarides model to explain the impact of growth on unemployment. Our quantitative analysis shows that our model increases the magnitude of the negative impact of growth on unemployment compared to the standard matching model with disembodied technological progress.

Testing for Equilibrium Multiplicity in Dynamic Markov Games

This paper proposes several statistical tests for finite state Markov games to examine the null hypothesis that the data are generated from a single equilibrium. We formulate tests of (i) the conditional choice probabilities, (ii) the steady-state distribution of states and (iii) the conditional distribution of states conditional on an initial state. In a Monte Carlo study we find that the chi-squared test of the steady-state distribution performs well and has high power even with a small number of markets and time periods. We apply the chi-squared test to the empirical application of Ryan (2012) that analyzes dynamics of the U.S. Portland Cement industry and test if his assumption of single equilibrium is supported by the data

Gravitational effects on vanishing Higgs potential at the Planck scale

We investigate gravitational effects on the so-called multiple point criticality principle (MPCP) at the Planck scale. The MPCP requires two degenerate vacua, whose necessary conditions are expressed by vanishing Higgs quartic coupling $\lambda(M_{\rm Pl})=0$ and vanishing its $\beta$ function $\beta_\lambda(M_{\rm Pl})=0$. We discuss a case that a specific form of gravitational corrections are assumed to contribute to $\beta$ functions of coupling constants although it is accepted that gravitational corrections do not alter the running of the standard model (SM) couplings. To satisfy the above two boundary conditions at the Planck scale, we find that the top pole mass and the Higgs mass should be $170.8\,{\rm GeV} \lesssim M_t\lesssim 171.7\,{\rm GeV}$ and $M_h=125.7\pm0.4\,{\rm GeV}$, respectively, as well as include suitable magnitude of gravitational effects (a coefficient of gravitational contribution as $|a_\lambda| > 2$). In this case, however, since the Higgs quartic coupling $\lambda$ becomes negative below the Planck scale, two vacua are not degenerate. We find that $M_h \gtrsim 131.5\,{\rm GeV}$ with $M_t \gtrsim 174\,{\rm GeV}$ is required by the realization of the MPCP. Therefore, the MPCP at the Planck scale cannot be realized in the SM and also the SM with gravity since $M_h \gtrsim 131.5\,{\rm GeV}$ is experimentally ruled out.Comment: 12 pages, 4 figures, version accepted for publication in PRD: typo corrected, references adde

Accurate renormalization group analyses in neutrino sector

We investigate accurate renormalization group analyses in neutrino sector between $\nu$-oscillation and seesaw energy scales. We consider decoupling effects of top quark and Higgs boson on the renormalization group equations of light neutrino mass matrix. Since the decoupling effects are given in the standard model scale and independent of high energy physics, our method can basically apply to any models beyond the standard model. We find that the decoupling effects of Higgs boson are negligible, while those of top quark are not. Particularly, the decoupling effects of top quark affect neutrino mass eigenvalues, which are important for analyzing predictions such as mass squared differences and neutrinoless double beta decay in an underlying theory existing at high energy scale.Comment: 20 pages, 21 figures, version accepted for publication in NPB. Typos and all figures in Sec.3 corrected, references added, new subsection (Sec.2.2) adde

Hierarchy problem, gauge coupling unification at the Planck scale, and vacuum stability

From the point of view of the gauge hierarchy problem, introducing an intermediate scale in addition to TeV scale and the Planck scale ($M_{\rm Pl} = 2.4 \times 10^{18}\,{\rm GeV}$) is unfavorable. In that way, a gauge coupling unification (GCU) is expected to be realized at $M_{\rm Pl}$. We explore possibilities of GCU at $M_{\rm Pl}$ by adding a few extra particles with TeV scale mass into the standard model (SM). When extra particles are fermions and scalars (only fermions) with the same mass, the GCU at $M_{\rm Pl}$ can (not) be realized. On the other hand, when extra fermions have different masses, the GCU can be realized around $\sqrt{8 \pi} M_{\rm Pl}$ without extra scalars. This simple SM extension has two advantages that a vacuum becomes stable up to $M_{\rm Pl}$ ($\sqrt{8 \pi} M_{\rm Pl}$) and a proton lifetime becomes much longer than an experimental bound.Comment: 19 pages, 4 figures. Published version in NPB. Abstract and Introduction are revise

How The Timing of Grade Retention Affects Outcomes: Identification and Estimation of Time-Varying Treatment Effects

Increasingly, grade retention is viewed as an important alternative to social promotion, yet evidence to date is unable to disentangle how the effect of grade retention varies by abilities and over time. The key challenge is differential selection of students into retention across grades and by abilities. Because existing quasi-experimental methods cannot address this question, we develop a new strategy that is a hybrid between a control function and a generalization of the fixed effects approach. Applying our method to nationally-representative, longitudinal data, we find evidence of dynamic selection into retention and that the treatment effect of retention varies considerably across grades and unobservable abilities of students. Our strategy can be applied more broadly to many time-varying or multiple treatment settings.time-varying treatments, dynamic selection, grade retention, factor analysis