A central limit theorem for endogenous locations and complex spatial interactions |
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Authors: | Joris Pinkse Lihong Shen Margaret Slade |
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Institution: | 1. Department of Economics, The Pennsylvania State University, 608 Kern Graduate Building, University Park PA 16802, USA;2. The University of Warwick, UK |
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Abstract: | We provide a new central limit theorem (CLT) for spatial processes under weak conditions that are plausible for many economic applications in which location is endogenous. In particular, our CLT is designed for problems that have some, but not necessarily all, of the following features: (i) Agents choose the locations of observations to maximize profits, welfare, or some other objective. (ii) The objects that are chosen (e.g., stores or brands) interact with one another. For example, they can be substitutes or complements. (iii) Interaction can be complex. In particular, interaction between i and j need not depend only on the distance between the locations of i and j, but can also depend on distance to or location of other observations k, or possibly on the number of other such observations. |
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Keywords: | C21 C31 |
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