Degree awarded (2004): PhDEc, Economics, George Washington University / This research introduces a new theoretical framework for the analysis of access pricing (the prices that networks charge each other for the completion of calls) and the modeling of network interconnection competition. Prior work on two-way access by Armstrong (1998), Laffont, Rey and Tirole (1998), and Carter and Wright (1999), et al has been built on a two-network Hotelling (1929) differentiated competition model applied to network interconnection. The current research develops an alternative approach that is based on a cross-nested logit (CNL) discrete/continuous consumer choice model with a constant elasticity of substitution (CES) calling utility specification. A principal contribution of the new modeling framework is that in addition to being able to analyze interconnection competition among multiple networks, it is designed to incorporate the element of multiple network subscription where consumers may simultaneously subscribed to more than one type of access network. By introducing multiple-network subscription and usage substitution for users subscribed to multiple networks, the analysis allows more general assessments to be made of the impact of access pricing schemes on the degree of competition between interconnected networks. The model is also not restricted to assumptions of homogeneity in calling on the differentiated networks but can incorporate call differentiation according to network type. The model is applied to evaluate the effects of dual network subscription and asymmetric network competition and to assess multi-network competition in an environment served by two mobile networks and a fixed, wireline network. While confirming the results of prior single network subscription analysis, a central finding of the research based on the developed model is that while network competition is intensified when dual network subscription occurs, negotiated access charges between connected networks continue to serve as an instrument of collusion even in cases of non-linear (two-part) consumer tariffs. / Advisory Committee: John Kwoka, Christopher Snyder (Chair), Sumit Joshi

The overall goal of the dissertation is to contribute to the growing literature on multiple discrete-continuous (MDC) choice models. In MDC choice situations, consumers often encounter two inter-related decisions at a choice instance – which alternative(s) to choose for consumption from a set of available alternatives, and the amount to consume of the chosen alternatives. In the recent literature, there is increasing attention on modeling MDC situations based on a rigorous underlying micro-economic utility maximization framework. Among these models, the multiple-discrete continuous extreme value MDCEV model (Bhat, 2005, 2008) provides a number of advantages over other models. The primary objective of this dissertation is to extend the MDCEV framework to accommodate more realistic decision-making processes from a behavioral standpoint. The dissertation has two secondary objectives. The first is to advance the current operationalization and the econometric modeling of MDC choice situations. The second is to contribute to the transportation literature by estimating MDC models that provide new insights on individuals’ travel decision processes. The proposed extensions of the MDCEV model include: (1) To formulate and estimate a latent choice set generation model within the MDCEV framework, (2) To develop a random utility-based model formulation that extends the MDCEV model to include multiple linear constraints, and (3) To extend the MDCEV model to relax the assumption of an additively separable utility function. The methodologies developed in this dissertation allow the specification and estimation of complex MDC choice models, and may be viewed as a major advance with the potential to lead to significant breakthroughs in the way MDC choices are structured and implemented. These methodologies provide a more realistic representation of the choice process. The proposed extensions are applied to different empirical contexts within the transportation field, including participation in and travel mileage allocated to non-work activities during various time periods of the day for workers, participation in recreational activities and time allocation for workers, and household expenditures in disaggregate transportation categories. The results from these exercises clearly underline the importance of relaxing some of the assumptions made, not only in the MDCEV model, but in MDC models in general. / text

abstract: Consumers search before making virtually any purchase. The notion that consumers engage in costly search is well-understood to have deep implications for market performance. However to date, no theoretical model allows for the observation that consumers often purchase more than a single product in an individual shopping occasion. Clothing, food, books, and music are but four important examples of goods that are purchased many items at a time. I develop a modeling approach that accounts for multi-purchase occasions in a structural way. My model shows that as preference for variety increases, so does the size of the consideration set. Search models that ignore preference for variety are, therefore, likely to under-predict the number of products searched. It is generally thought that lower search costs increase retail competition which pushes prices and assortments down. However, I show that there is an optimal number of products to offer depending on the intensity of consumer search costs. Consumers with high search costs prefer to shop at a store with a large assortment of goods and purchase multiple products, even if the prices that firm charges is higher than competing firms' prices. On the other hand, consumers with low search costs tend to purchase fewer goods and shop at the stores that have lower prices, as long as the store has a reasonable assortment offering. The implications for market performance are dramatic and pervasive. In particular, the misspecification of demand model in which search is important and/or multiple discreteness is observed will produce biased parameter estimates leading to erroneous managerial conclusions. / Dissertation/Thesis / Ph.D. Business Administration 2013