nep-dcm New Economics Papers
on Discrete Choice Models
Issue of 2012‒09‒22
four papers chosen by
Philip Yu
Hong Kong University

  1. Regional Motives for Post-Entry Subsidiary Development: The Case of Poland By Agnieszka Chidlow; Christine Holmstrom-Lind; Ulf Holm; Heinz Tuselmann
  2. The Determinants of Election to the United Nations Security Council By Axel Dreher; Matthew Gould; Matthew D. Rablen; James Raymond Vreeland
  3. The Effects of Experience on Preference Uncertainty: Theory and Empirics for Public and Quasi-Public Goods By Czajkowski, Mikolaj; Hanley, Nick; LaRiviere, Jacob
  4. The Joint Identification of Utility and Discount Functions From Stated Choice Data: An Application to Durable Goods Adoption By Jean-Pierre H. Dube; Günter J. Hitsch; Pranav Jindal

  1. By: Agnieszka Chidlow; Christine Holmstrom-Lind; Ulf Holm; Heinz Tuselmann
    Abstract: The issue of location-specific factors of a multinational company’s activities has long been investigated by international business scholars. To our knowledge, however, all these studies have put attention on the pre-entry location decision of foreign subsidiaries, rather than the post-entry decision. As such, by incorporating a regional perspective into the study of a subsidiary’s development this work offers an understanding of the importance of location-specific factors for the post-entry development of a multinational company’s subsidiaries at the regional level. The empirical analysis, used in this work, utilises a discrete-choice model with primary data from an online survey of 91 foreign-owned subsidiaries in Poland. The results demonstrate that the Mazowieckie region is the most attractive location for post-entry subsidiary development if knowledge-seeking factors are important to MNCs. Further, the findings indicate that South-East and South-West regions are more favoured for post-entry subsidiary development when efficiencyseeking factors are important to multinational companies. The findings also show that none of the examined regions are significant for the post-entry subsidiary’s development if agglomerations factors and infrastructure are important to multinational companies.
    Keywords: international business, subsidiary development, regional motives, transition context
    JEL: M19 L21 L60
    Date: 2012–06–01
  2. By: Axel Dreher; Matthew Gould; Matthew D. Rablen; James Raymond Vreeland
    Abstract: The United Nations Security Council (UNSC) is the foremost international body responsible for the maintenance of international peace and security. Members vote on issues of global importance and consequently receive perks – election to the UNSC predicts, for instance, World Bank and IMF loans. But who gets elected to the UNSC? Addressing this question empirically is not straightforward as it requires a model that allows for discrete choices at the regional and international levels; the former nominates candidates while the latter ratifies them. Using an original multiple discrete choice model to analyze a dataset of 180 elections from 1970 to 2005, we find that UNSC election appears to derive from a compromise between the demands of populous countries to win election more frequently and a norm of giving each country its turn. Involvement in warfare lowers election probability, but there is little evidence that the level of economic development or foreign aid predict election.
    Date: 2012–07
  3. By: Czajkowski, Mikolaj; Hanley, Nick; LaRiviere, Jacob
    Abstract: This paper develops a model of demand estimation in which consumers learn about their true preferences through consumption experiences. We develop a theoretical model of Bayesian updating, perform comparative statics over the model, and show how the theoretical model can be consistently incorporated into a reduced form econometric model. We then estimate the model using data collected for two quasi experience with a good will make consumers more certain over their preferences in both mean and variance are supported in each case.‐public goods. We find that the predictions of the theoretical exercise that addition
    Keywords: Bayesian, demand estimation, stated preference, generalized multinomial logit, scale, scale variance.
    Date: 2012–08
  4. By: Jean-Pierre H. Dube; Günter J. Hitsch; Pranav Jindal
    Abstract: We present a survey design that generalizes static conjoint experiments to elicit inter-temporal adoption decisions for durable goods. We show that consumers’ utility and discount functions in a dynamic discrete choice model are jointly identified using data generated by this specific design. In contrast, based on revealed preference data, the utility and discount functions are generally not jointly identified even if consumers’ expectations are known. The separation of current-period preferences from discounting is necessary to forecast the diffusion of a durable good under alternative marketing strategies. We illustrate the approach using two surveys eliciting Blu-ray player adoption decisions. Both model-free evidence and the estimates based on a dynamic discrete choice model indicate that consumers make forward-looking adoption decisions. In both surveys the average discount rate is 43 percent, corresponding to a substantially higher degree of impatience than the rate implied by aggregate asset returns. The estimates also reveal a large degree of heterogeneity in the discount rates across consumers, but only little evidence for hyperbolic discounting.
    JEL: C14 D12 D9 M31
    Date: 2012–09

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