Essays on the structural analysis of strategic choice

A strategic environment is one in which the payoffs of individual players are inter-linked to the choices of other players. Since a player's payoffs are affected by other players' choices, each player will react to the choices of other players. Players therefore incorporate the likely reactions of other players while making their choices. Such choices where the likely reactions of competing players are incorporated while making choices are called strategic. Game theory is a useful analytical tool for the analysis of strategic choice. The core elements of a game theoretic analysis are the payoff functions of players and an equilibrium notion that specifies the nature of the interactions (and therefore reactions) between players. In a structural analysis of strategic choice, the goal is to infer the parameters associated with the payoffs of players and the equilibrium that characterizes the interactions between players.; This dissertation consists of three essays on the structural analysis of strategic choice. The first essay deals with the issue of structural analysis of competitive behavior in markets with high product variety. It uses this approach to analyze differences in competitive behavior among domestic firms in the small car and intermediate segments of the auto market. We find that firms compete aggressively in the small car segment, but are relatively cooperative in the intermediate car segment. The second essay deals with the issue of accounting for strategic retailer behavior when estimating competitive interactions among manufacturers who sell through common retailers. Using scanner data, we infer the nature of competitive interaction among manufacturers and between manufacturers and the retailer. Since wholesale prices are unobserved in scanner data, the paper uses game theoretic modeling to infer wholesale prices for estimation. The third essay reviews the literature on structural analysis of strategic choice. We focus on the methodological innovations in the literature and provide an agenda for future work.