Identification and Estimation of Online Price Competition with an Unknown Number of Firms
AbstractThis paper considers identification and estimation of a general model for online price competition. We show that when the number of competing firms is unknown, the underlying parameters of the model can still be identified and estimated employing recently developed results on measurement error. With the estimates of model parameters, we are able to analyze the competitive effects of online competition when the number of firms changes. We illustrate our methodology using UK data for personal digital assistants and employ the estimates to simulate competitive effects. Our results reveal that heightened competition has differential effects on the prices paid by different consumer segments.
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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 2010-17.
Date of creation: Jul 2010
Date of revision: Nov 2012
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E-Retail Markets; Nonparametric Identification; Structural Estimation;
Find related papers by JEL classification:
- L0 - Industrial Organization - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-27 (All new papers)
- NEP-BEC-2010-11-27 (Business Economics)
- NEP-COM-2010-11-27 (Industrial Competition)
- NEP-ICT-2010-11-27 (Information & Communication Technologies)
- NEP-IND-2010-11-27 (Industrial Organization)
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