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Sault, Joanne E., Toivanen, Otto and Waterson, Michael, 1950- (2003) Learning and location. Working Paper. University of Warwick, Department of Economics, Coventry.

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Abstract

In this paper we study whether learning from rivals affects within-market location decisions between competing firms. We show it does, using detailed locational data from two leading hamburger chains in the UK. Using four different tests, we demonstrate that alternative explanations - pre-emption and product differentiation - have less bite than between firm learning.

Item Type: Working or Discussion Paper (Working Paper)
Subjects: H Social Sciences > HF Commerce
Divisions: Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH): Fast food restaurants, Competition, Franchises (Retail trade), Organizational learning
Series Name: Warwick economic research papers
Publisher: University of Warwick, Department of Economics
Place of Publication: Coventry
Date: 2003
Number: No.693
Number of Pages: 32
Status: Not Peer Reviewed
Access rights to Published version: Open Access
Funder: Economic and Social Research Council (Great Britain) (ESRC), Yrjö Jahnssonin säätiö [Yrjö Jahnsson Foundation]
Grant number: R000238402 (ESRC)
References: Baum, J.A.C., Li, S.X., and Usher, J.M., 2000, "Making the Next Move: How Experiental and Vicarious Learning Shape the Locations of Firms Acquisitions", Administrative Science Quarterly, 45, pp.766-801. Berry, S.T., 1992, "Estimation of a Model of Entry in the Airline Industry”, Econometrica, 60, pp. 889-917. Bresnahan, T.F., and Reiss, P.C., 1989, “Do Entry Conditions Vary Across Markets?”, Brookings Papers on Economic Activity, 3, 883-871. Bresnahan, T.F., and Reiss, P.C., 1990a, “Entry in Monopoly Markets”, Review of Economic Studies, 57, 531-553. Bresnahan, T.F., and Reiss, P.C., 1990b, “Empirical Models of Discrete Games”, Journal of Econometrics, 48, 1-2, 57-81. Bresnahan, T.F. and Reiss, P.C., 1991, “Entry and Competition in Concentrated Markets”, Journal of Political Economy, 99, 977-1009. Bresnahan, T.F., and Reiss, P.C., 1994, “Measuring the Importance of Sunk Costs”, Annales d’Economie et de Statistique, 0, 181-217. Caplin, A. and Leahy, J., 1998, "Miracle on Sixth Avenue: Information externalities and search," Economic Journal, 60-74. Competition Commission, 2000, Supermarkets: A report on the supply of groceries from multiple stores in the United Kingdom, Cm 4842, HMSO, London. Davis, P., 2002, The Effect of Local Competition on Retail Prices: The US Motion Picture Exhibition Market, mimeo, LSE. DeGroot, M.H., 1970, Optimal Statistical Decisions, New York, McGraw-Hill. Eaton, B.C. and Lipsey, R.G., 1979, The theory of market pre-emption: The persistence of excess capacity and monopoly in growing markets, Economica, 46, 149-158. Ellison, G., and Glaeser, E., 1997, Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach, Journal of Political Economy, 105, 5, 889-927. Ellison, G., and Gleaser, 1999, The Geographic Concentration of Industry::Does Natural Advantage Explain Agglomeration? American Economic Review, 89, 2, 311-316 Joseph, A., 2003, Spatial competition between franchisees, Mimeo, Tinbergen Institute. November. Mazzeo, M., 2002, “Product Choice and Oligopoly Market Structure”, RAND Journal of Economics, 33, 221-242. McKinsey, 1988, Driving productivity and growth in the UK economy, McKinsey Inc, London. Mintel, 1998, Burger and chicken restaurants- UK- April 1998, Mintel International Group. Petrin, A., 2002, Quantifying the Benefits of New Products: The Case of the Minivan, Journal of Political Economy , 110, 705-729. Seim., K, 2002, An Empirical Model of Firm Entry with Endogenous Product-Type Choices, mimeo, GSB Stanford. Toivanen, O., and Waterson, M., 2003, Market structure and Entry: Where’s the Beef? Mimeo, University of Warwick. Trajtenberg, M., 1989, The Welfare Analysis of Product Innovations, with an Application to Computed Tomography Scanners, Journal of Political Economy, 97, 444-479. West, D.S., 1981, Testing for market preemption using sequential location data, Bell Journal of Economics, 12, 129-143.
URI: http://wrap.warwick.ac.uk/id/eprint/1494

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