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This paper develops a novel econometric framework for static discrete choice games with costly information acquisition. In traditional discrete games, players are assumed to perfectly know their own payoffs when making decisions, ignoring that information acquisition can be a strategic choice. In the proposed framework, I relax this assumption by allowing players to face uncertainty about their own payoffs and to optimally choose both the precision of information and their actions, balancing the expected payoffs from precise information against the information cost. The model provides a unified structure to analyze how information and strategic interactions jointly determine equilibrium outcomes. The model primitives are point identified, and the identification results are illustrated through Monte Carlo experiments. The empirical application of the U.S airline entry game shows that the low-cost carriers acquire less precise information about profits and incur lower information costs than other airlines, which is consistent with their business model that focuses on cost efficiency. The analysis highlights how differences in firms’ information strategies can explain observed heterogeneity in market entry behavior and competition.

Work in progress | Abstract

Work in progress | Abstract

Available upon request | Abstract

This paper qualitatively analyzes the financial performance of 2,074 small and medium-sized biotechnology firms using firm-level panel data including finance information, government research and development(R&D) grants and venture (innovative startup) certification from 2009 to 2015. We evaluate the effects of government R&D and the venture support policies in biotechnology industry, and provide implications for policy direction. The result shows that the government R&D and the venture support policies do not improve the firms’ financial performance until at least five years. The firms’ own investments of R&D by themselves, however, enhance the financial performance in the long run. More careful analysis is needed to explain why the government R&D and the venture support policies do not increase the financial performance of small and medium-sized biotechnology firms in the short term. In addition, since it takes a long time before the effect of the government support policy appears, accumulating and monitoring data should precede the analysis of the long term effect.