Competition and the Strategic Choices of Churches

Abstract

In this paper, we examine how the decisions of churches are impacted by the decisions of rival churches. Using a novel data set of Christian churches in two suburban Nashville, TN counties, we estimate a model of strategic interaction based on empirical models of discrete games. We focus on a church's decision of whether or not to provide a week-day child care program. Empirical evidence indicates that churches are more likely to offer a service when a nearby same-denomination church offers it, but are less likely to offer the service if a nearby different-denomination church offers the service. This suggests that churches may feel pressure to match the services offered by same-denomination churches. Using our estimates, we conduct counterfactual simulations which indicate that a new church's entry may increase or decrease the number of churches offering child care depending on the size and denomination of the entrant. Additional counterfactual simulations indicate that in some cases, increases in population may decrease the probability of a church offering child care.

Playing the Fertility Game at Work: An Equilibrium Model of Peer Effects

“…The approach in this article builds on the methods developed in Ciliberto and Tamer () to incorporate multiple equilibria in estimation without imposing any rules for equilibrium selection in the regions of multiplicity (as is done, for example, in Krauth, ; Cohen et al., ; Rennhoff and Owens, ; Card and Giuliano, ). Ciliberto and Tamer () show that there is a methodological trade‐off between point identification and assumptions on the nature of the heterogeneity across agents, but that it is possible to identify the sets of parameters (partial identification) such that the choice probabilities predicted by the econometric model are consistent with the empirical choice probabilities estimated from the data.…”

Playing the Fertility Game at Work: An Equilibrium Model of Peer Effects

“…The approach in this article builds on the methods developed in Ciliberto and Tamer (2009) to incorporate multiple equilibria in estimation without imposing any rules for equilibrium selection in the regions of multiplicity (as is done, for example, in Krauth, 2006;Cohen et al, 2013;Rennhoff and Owens, 2012;Card and Giuliano, 2013). Ciliberto and Tamer (2009) show that there is a methodological trade-off between point identification and assumptions on the nature of the heterogeneity across agents, but that it is possible to identify the sets of parameters (partial identification) such that the choice probabilities predicted by the econometric model are consistent with the empirical choice probabilities estimated from the data.…”

Empirical Models of Firms and Industries

“…Since the seminal work by Bresnahan andReiss (1990, 1991) and Berry (1992), empirical IO has experienced a substantial growth in the estimation of discrete choice games of oligopoly competition. This class of models has been applied to study market entry but also other forms of competition at the extensive margin such as product design (Mazzeo 2002, Draganska et al 2009), store location (Seim 2006), release date of a movie (Einav 2010), form of pricing (Ellickson and Misra 2008) or provision of customer services (Rennhoff and Owens 2012), among others.…”