Merger Simulation with Nested Logit Demand - Implementation using Stata
AbstractIn this article we show how to implement merger simulation in Stata after estimating an aggregate nested logit demand system with a linear regression model. We also show how to implement merger simulation when the demand parameters are not estimated, but instead calibrated to be consistent with outside information on average price elasticities and profit margins.
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Bibliographic InfoPaper provided by Konkurrensverket (Swedish Competition Authority) in its series Konkurrensverket Working Paper Series in Law and Economics with number 2013:2.
Length: 20 pages
Date of creation: 15 Apr 2013
Date of revision:
mergersim; merger simulation; aggregate nested logit model; unit demand; constant expenditures demand;
Find related papers by JEL classification:
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- C87 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Econometric Software
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-20 (All new papers)
- NEP-CMP-2013-07-20 (Computational Economics)
- NEP-COM-2013-07-20 (Industrial Competition)
- NEP-DCM-2013-07-20 (Discrete Choice Models)
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