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The Impact of Omitting Promotion Variables on Simulation Experiments

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Author Info
David A. Weiskopf

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Abstract

Using store-level scanner data, elasticity matrices are estimated using a twotiered demand system. Two basic models are estimated, one with promotion variables and one without. Differences between the estimates across the two models are statistically significant. However, when the elasticities are used as 'inputs' into several simulation exercises, there are only small differences in merger effects and patent damage estimates.The results suggest that the differences are not 'economically' significant.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal International Journal of the Economics of Business.

Volume (Year): 7 (2000)
Issue (Month): 2 (July)
Pages: 159-166
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Handle: RePEc:taf:ijecbs:v:7:y:2000:i:2:p:159-166

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Related research
Keywords: Antitrust Aids Demand Merger Simulation Patent Damage Simulation Scanner Data Omitted Variables Bias;

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Jerry A. Hausman & Gregory Leonard & J. Douglas Zona, 1994. "Competitive Analysis with Differentiated Products," Annales d'Economie et de Statistique, ADRES, issue 34, pages 07, Avril-Jui. [Downloadable!]
  2. Aviv Nevo & Catherine Wolfram, 1999. "Prices and Coupons for Breakfast Cereals," NBER Working Papers 6932, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Gregory J. Werden, Luke M. Froeb, James Langenfeld, 2000. "Lost Profits from Patent Infringement: The Simulation Approach," International Journal of the Economics of Business, Taylor and Francis Journals, vol. 7(2), pages 213-227, July. [Downloadable!] (restricted)
  4. Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-71, November. [Downloadable!] (restricted)
  5. Philip Crooke & Luke Froeb & Steven Tschantz & Gregory Werden, 1999. "Effects of Assumed Demand Form on Simulated Postmerger Equilibria," Review of Industrial Organization, Springer, vol. 15(3), pages 205-217, November. [Downloadable!] (restricted)
  6. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June. [Downloadable!] (restricted)
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