An empirical analysis of entry and location decisions by bars and liquor stores

Yi Deng () and Gabriel Picone ()
Additional contact information
Yi Deng: Federal Trade Commission
Gabriel Picone: University of South Florida

Empirical Economics, 2019, vol. 57, issue 5, No 11, 1782 pages

Abstract: Abstract We analyze the entry and location decisions of bars and liquor stores using a spatial game-theoretical framework. We first estimate a one-industry location game where we model bars and liquor stores separately. We then estimate a two-industry location game where we model bars and liquor stores jointly. The model allows for two contradictory effects: a competition effect and a spillover effect. Estimation results reveal a strong negative competition effect for both bars and liquor stores. However, bars appear to benefit from a substantially positive spillover effect. We also find that bars and liquor stores compete with each other. For example, an additional liquor store in a location decreases the probability of a new bar opening in that location and vice versa.

Keywords: Location games; Competition and spillover effects; Alcohol establishments (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s00181-018-1507-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:empeco:v:57:y:2019:i:5:d:10.1007_s00181-018-1507-7

Ordering information: This journal article can be ordered from
http://www.springer. ... rics/journal/181/PS2

DOI: 10.1007/s00181-018-1507-7

Access Statistics for this article

Empirical Economics is currently edited by Robert M. Kunst, Arthur H.O. van Soest, Bertrand Candelon, Subal C. Kumbhakar and Joakim Westerlund

More articles in Empirical Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().