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The Economics of Spatial Coordination in Critical Infrastructure Investment

L Kaili Diamond, Benjamin Gilbert

arXiv 5 Nov 2025 · Econometrics

arXiv:2511.03091 · PDF · Extracted main text

Abstract

We develop a hybrid approach to estimate spatial coordination mechanisms in structural dynamic discrete choice models by combining nested fixed-point (NFXP) dynamic programming with method of simulated moments (MSM), achieving computational tractability in spatial settings while preserving structural interpretation. Applying this framework to GPU replacement data from 12,915 equipment locations in Oak Ridge National Laboratory's Titan supercomputer, we identify two distinct coordination mechanisms: sequential replacement cascades (gamma_lag = -0.793) and contemporaneous failure batching (gamma_fail = -0.265). Sequential coordination dominates - approximately three times stronger than failure batching - indicating that operators engage in deliberate strategic behavior rather than purely reactive responses. Spatial interdependencies account for 5.3% of variation unexplained by independent-decision models, with coordination concentrated in high-risk thermal environments exhibiting effects more than 10 times stronger than cool zones. Formal tests decisively reject spatial independence (chi-squared(2) = 685.38, p < 0.001), demonstrating that infrastructure policies ignoring spatial coordination will systematically mistime interventions and forgo available coordination gains.

Citation extraction

16
references
25
in-text mentions
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12,995
main-text words

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Rust, John (1987) Optimal replacement of GMC bus engines: An empirical model of Harold Zurcher1.00064100%
2Ostrouchov, George and Maxwell, Don and Ashraf, Rizwan A. and Engelm… (2020) GPU Lifetimes on Titan Supercomputer: Survival Analysis and Reliability0.73732100%
3Aguirregabiria, Victor and Mira, Pedro (2010) Dynamic discrete choice structural models: A survey0.64422100%
4LeSage, James and Pace, R Kelley (2009) Introduction to spatial econometrics0.64422100%
5Anselin, Luc (1988) Spatial econometrics: methods and models0.40511100%
6Bandiera, Oriana and Rasul, Imran (2006) Social Networks and Technology Adoption in Northern Mozambique0.40511100%
7Berry, Steven and Levinsohn, James and Pakes, Ariel (1995) Automobile Prices in Market Equilibrium0.40511100%
8Conley, Timothy G. and Udry, Christopher R (2010) Learning About a New Technology: Pineapple in Ghana0.40511100%
9Keane, Michael P. and Wolpin, Kenneth I (1997) The Career Decisions of Young Men0.40511100%
10Klier, Thomas and McMillen, Daniel P (2008) Clustering of Auto Supplier Plants in the United States0.40511100%

Showing the top 10 of 16 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Scalable Structural Estimation of Networked Infrastructure: Exact Decomposition for Localized Coordination0.64422