A Simplified Mixed Logit Demand Model with an Application to the Simulation of Entry
AbstractThe key contribution of this paper is to show how to incorporate more information into the empirical strategy in order to avoid the need of valid instruments, which are difficult to find in many instances. I use information on price elasticity to propose a methodology that is able to determine the parameters of a simplified Mixed Logit Model. I also apply this methodology to the ready-to-eat cereal industry and simulate the competitive and welfare effects of the introduction of new products.
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Bibliographic InfoPaper provided by Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto in its series Working Papers with number 04-2011.
Date of creation: 2011
Date of revision:
Discrete-Choice; Demand Models; Competition;
Find related papers by JEL classification:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-09-22 (All new papers)
- NEP-COM-2011-09-22 (Industrial Competition)
- NEP-DCM-2011-09-22 (Discrete Choice Models)
- NEP-IND-2011-09-22 (Industrial Organization)
- NEP-MKT-2011-09-22 (Marketing)
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.:
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- Nevo, Aviv, 1998. "Measuring Market Power in the Ready-To-Eat Cereal Industry," Food Marketing Policy Center Research Reports 037, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
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