On the Identification of the Costs of Simultaneous Search
AbstractThis paper studies the identification of the costs of simultaneous search in a class of (portfolio) problems studied by Chade and Smith (2006). We show that aggregate data from a single market, or disaggregate data from a single market segment, do not provide sufficient information to identify the costs of simultaneous search in any reasonable interval. We then show that by pooling aggregate data from multiple markets, or disaggregate data from multiple market segments, the econometrician can identify the costs of simultaneous search in a non-empty interval. Within the context of specific examples, we illustrate that identification of the search cost distribution in its full support may easily be obtained.
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Bibliographic InfoPaper provided by Indiana University, Kelley School of Business, Department of Business Economics and Public Policy in its series Working Papers with number 2010-10.
Date of creation: Jul 2010
Date of revision:
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search costs; portfolio choice; non-parametric identification;
Other versions of this item:
- Moraga-Gonzalez, Jose L. & Sandor, Zsolt & Wildenbeest, Matthijs R., 2010. "On the identification of the costs of simultaneous search," IESE Research Papers D/867, IESE Business School.
- Jose L. Moraga-Gonzalez & Zsolt Sandor & Matthijs R. Wildenbeest, 2010. "On the Identification of the Costs of Simultaneous Search," Tinbergen Institute Discussion Papers 10-066/1, Tinbergen Institute, revised 12 May 2011.
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-09-11 (All new papers)
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