Special Studies Project Report

Applications of Discrete Choice Theory to industrial organisation and political economy

Kieron Meagher, School of Economics, 25 July 2005 to 4 January 2006.

Discrete choice theory is a relatively new area of economics focusing primarily on binary decisions such as whether or not to buy a new car. Earlier economic theories were based around continuous choices of how much to buy.

While on SSP I collaborated with Professor Simon Anderson of the University of Virginia to develop a theory of political parties in which citizens decide whether to become activists, or not, and based on how their activities will influence party policy and party success.

I also worked with Professor Klaus Zauner on generalising our previous model of competition between firms facing uncertain consumer tastes.