| This thesis presents three essays devoted to the study of Industrial Organization. Each chapter applies modern computational techniques to broaden the field.;Chapter One presents an empirical investigation of discrete-choice games requiring assumptions about payoff functions and player information sets. In practice, applied researchers have focused on the estimation of payoff functions using strict informational assumptions. In this chapter, I propose a flexible information structure that nests two common informational assumptions: complete and incomplete information. As with other models of discrete-choice games, the parameters of player payoff functions are point identified if the model covariates have sufficiently rich support. In addition, the model provides testable restrictions on the information structure of the data-generating process. I apply the model to study the impact of supercenters on entry and exit patterns of grocery stores in rural markets and show that the model can produce useful bounds on counterfactual outcomes. Finally, I find that models that account for only incomplete information are excluded from the confidence set of the general model, while the complete information model produces qualitatively different counterfactuals.;Chapter Two analyzes a dynamic model to study the effects of switching costs on firm pricing when switching costs are low enough that equilibrium behavior includes switching by consumers. In contrast to the well-studied case when switching costs are very high, I find that low to moderate switching costs may actually reduce firm prices. While earlier studies focus on a static harvesting incentive to increase prices, and a dynamic investing incentive to lower prices, my model identifies a third "consumer flows" effect that causes firms to lower prices in the presence of switching costs even if they ignore dynamic incentives. The logic behind this new effect is similar to a firm's incentive to lower prices to partially absorb a retail sales tax. If a firm's marginal consumer is not likely to be loyal to their product, the firm reacts to an increase in switching costs by reducing prices in order to compensate unloyal consumers for switching. I show that this effect, together with the dynamic investing effect, may dominate the harvesting incentive for low to moderate values of switching costs. This analysis implies that moderate switching costs are not a compelling reason to regulate prices in an otherwise competitive industry.;Chapter Three is a methodological contribution on the approximation of an equilibrium correspondence of a dynamic game of incomplete information. These models have been used in a variety of recent empirical and theoretical papers, however equilibrium can be very costly to compute. The method presented here harnesses homotopy continuation to compute equilibria for a set of models spanning several dimensions of the parameter space. The approach can easily make use of parallel processing, and can be used either for estimation, or to compute counterfactuals for a model that is estimated without computing equilibrium. |
