Who Thinks about the Competition? Managerial Ability and Strategic Entry in US Local Telephone Markets
AbstractWe examine US local telephone markets shortly after the Telecommunications Act of 1996. The data suggest that more experienced, better-educated managers tend to enter markets with fewer competitors. This motivates a structural econometric model based on behavioral game theory that allows heterogeneity in managers' ability to conjecture competitor behavior. We find that manager characteristics are key determinants in managerial ability. This estimate of ability predicts out-of-sample success. Also, the measured level of ability rises following a shakeout, suggesting that our behavioral assumptions may be most relevant early in the industry's life cycle. (JEL L96, L98, M10)
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Review.
Volume (Year): 101 (2011)
Issue (Month): 7 (December)
Other versions of this item:
- Avi Goldfarb & Mo Xiao, 2008. "Who thinks about the competition? Managerial ability and strategic entry in US local telephone markets," Working Papers 08-21, NET Institute, revised Oct 2008.
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Gill, David & Prowse, Victoria, 2012.
"Cognitive ability and learning to play equilibrium: A level-k analysis,"
38317, University Library of Munich, Germany, revised 23 Apr 2012.
- David Gill & Victoria Prowse, 2013. "Cognitive ability and learning to play equilibrium: A level-k analysis," Economics Series Working Papers 641, University of Oxford, Department of Economics.
- Naoaki Minamihashi, 2012. "Natural Monopoly and Distorted Competition: Evidence from Unbundling Fiber-Optic Networks," Working Papers 12-26, Bank of Canada.
- Victor Aguirregabiria & Arvind Magesan, 2012.
"Identification and Estimation of Dynamic Games when Players' Beliefs Are Not in Equilibrium,"
2012-03, Department of Economics, University of Calgary.
- Victor Aguirregabiria & Arvind Magesan, 2012. "Identification and estimation of dynamic games when players' beliefs are not in equilibrium," Working Papers tecipa-449, University of Toronto, Department of Economics.
- Michelle Alexopoulos & Trevor Tombe, 2010.
tecipa-406, University of Toronto, Department of Economics.
- Li, Shanjun & Liu, Yanyan & Deininger, Klaus W., 2009.
"How Important are Peer Effects in Group Lending? Estimating a Static Game of Incomplete Information,"
2009 Conference, August 16-22, 2009, Beijing, China
51699, International Association of Agricultural Economists.
- Li, Shanjun & Liu, Yanyan & Deininger, Klaus, 2009. "How important are peer effects in group lending?: Estimating a static game of incomplete information," IFPRI discussion papers 940, International Food Policy Research Institute (IFPRI).
- Li, Shanjun & Liu, Yanyan & Deininger, Klaus W., 2009. "How Important are Peer Effects in Group Lending? Estimating a Static Game of Incomplete Information," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49497, Agricultural and Applied Economics Association.
- Mo Xiao & Ying Fan, 2012. "Entry under Subsidy: the Competitive U.S. Local Telephone Industry," 2012 Meeting Papers 374, Society for Economic Dynamics.
- Nathan Yang, 2011. "An Empirical Model of Industry Dynamics with Common Uncertainty and Learning from the Actions of Competitors," Working Papers 11-16, NET Institute.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros) or (Michael P. Albert).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.