The Logit as a Model of Product Differentiation PDF Download
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Author: Simon P. Anderson
Publisher:
ISBN:
Category :
Languages : en
Pages : 40
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Book Description
Author: Simon P. Anderson
Publisher:
ISBN:
Category :
Languages : en
Pages : 40
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Book Description
Author: Simon P. Anderson
Publisher:
ISBN:
Category :
Languages : en
Pages : 34
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Book Description
Author: Simon P. Anderson
Publisher: MIT Press
ISBN: 9780262011280
Category : Business & Economics
Languages : en
Pages : 454
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Book Description
"The discrete choice approach provides an ideal framework for describing the demands for differentiated products and can be used for studying most product differentiation models in the literature. By introducing extra dimensions of product heterogeneity, the framework also provides richer models of firm location and product selection."--BOOK JACKET.
Author: Simon P. ANDERSON
Publisher:
ISBN:
Category :
Languages : en
Pages : 34
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Book Description
Author: Laura Grigolon
Publisher:
ISBN:
Category : Choice of transportation
Languages : en
Pages : 0
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Book Description
We start from an aggregate random coefficients nested logit (RCNL) model to provide a systematic comparison between the tractable logit and nested logit (NL) models with the computationally more complex random coefficients logit (RC) model. We first use simulated data to assess possible parameter biases when the true model is a RCNL model. We then use data on the automobile market to estimate the different models, and as an illustration assess what they imply for competition policy analysis. As expected, the simple logit model is rejected against the NL and RC model, but both of these models are in turn rejected against the more general RCNL model. While the NL and RC models result in quite different substitution patterns, they give robust policy conclusions on the predicted price effects from mergers. In contrast, the conclusions for market definition are not robust across different demand models. In general, our findings suggest that it is important to account for sources of market segmentation that are not captured by continuous characteristics in the RC model.
Author: John Beath
Publisher: Cambridge University Press
ISBN: 9780521335522
Category : Business & Economics
Languages : en
Pages : 220
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Book Description
There are few industries in modern market economies that do not manufacture differentiated products. This book provides a systematic explanation and analysis of the widespread prevalence of this important category of products. The authors concentrate on models in which product selection is endogenous. In the first four chapters they consider models that try to predict the level of product differentiation that would emerge in situations of market equilibrium. These market equilibria with differentiated products are characterised and then compared with social welfare optima. Particular attention is paid to the distinction between horizontal and vertical differentiation as well as to the related issues of product quality and durability. This book brings together the most important theoretical contributions to these topics in a succinct and coherent manner. One of its major strengths is the way in which it carefully sets out the basic intuition behind the formal results. It will be useful to advanced undergraduate and graduate students taking courses in industrial economics and microeconomic theory.
Author: Jinghai Huo
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Since the seminal work by Berry-Levinsohn-Pakes (BLP), random coefficient logit (RCL) has become the workhorse model to estimate demand elasticities in markets with differentiated products using aggregated sales data. While the ability to represent flexible substitution patterns makes RCL a preferable model, its estimation is computationally challenging due to the numerical inversion of the demand function. Recently proposed inverse product differentiation logit (IPDL) claims to address these computational challenges by directly specifying the inverse demand function and representing flexible substitution patterns through non-hierarchical product segmentation in multiple dimensions. Unlike the two-stage simulation-based estimation of RCL, IPDL requires estimating a traditional linear instrumental variable regression model. In theory, IPDL appears to be an attractive alternative to RCL, but its potential has not yet been explored in empirical studies. We present the first application of IPDL in understanding the demand for passenger cars in China using province-level sales data. Our results indicate that demand elasticity estimates of IPDL and RCL are not statistically different, i.e., IPDL could capture substitution patterns similar to RCL. The estimation of IPDL takes less than a second on a regular computer (i.e., over 500 times faster than RCL). Overall, the flexibility and computational efficiency of IPDL could make it a workhorse model for demand estimation using market-level aggregated sales data.
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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It is not so much the framework used but rather the structure of product differentiation that is critical to the predictions and results. [...] The Nash equilibrium is back-to-back pairing at the median of the consumer distribution, a result christened the Principle of Minimum Differentiation. [...] In models such as the circle model, the emphasis is on the number of products produced in equilibrium and exogenous symmetric locations are effectively imposed: however, the standard symmetric location pattern can be proved to be a location equilibrium under some circumstances. [...] The CES model is a variant of the logit model, and a representative consumer does exist for the circle model and for probabilistic discrete choice models. [...] Later work showed Chamberlin to be right that the market would settle on the same amount of product diversity as the (zero-profit constrained) optimum in the central case of CES preferences (and for the logit model).
Author: Daniel A. Ackerberg
Publisher:
ISBN:
Category : Consumers' preferences
Languages : en
Pages : 33
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Book Description
Standard discrete choice models such as logit, nested logit, and random coefficients models place very strong restrictions on how unobservable product space increases with the number of products. We argue (and show with Monte Carlo experiments) that these restrictions can lead to biased conclusions regarding price elasticities and welfare consequences from additional products. In addition, these restrictions can identify parameters which are not intuitively identified given the data at hand. We suggest two alternative models that relax these restrictions, both motivated by structural interpretations. Monte-Carlo experiments and an application to data show that these alternative models perform well in practice
Author: Jacques François Thisse
Publisher:
ISBN:
Category : Competition
Languages : en
Pages : 408
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Book Description
