This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Multiproduct Firms: A Nested Logit Approach

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Simon P. Anderston
Andre de Palma

Additional information is available for the following registered author(s):

Abstract

Thie paper proves the existence of a symmetric equilibrium with multiproduct firms using a nested logit model of demand. The demand model is parametrized by two variable which characterize different dimensions of preference variety. These reflect intragroup heterogeneity and intergropu heterogeneity, a group (or nest) being the set of products produced by a firm. There are then two dimensions to market performance; the total number of firms and the range of products produced per firm. It is shown that the market equilibrium involves an excessive number of firms, but each firm provides too few products.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.kellogg.northwestern.edu/research/math/papers/973.pdf
File Format: application/pdf
File Function: main text
Download Restriction: no

Publisher Info
Paper provided by Northwestern University, Center for Mathematical Studies in Economics and Management Science in its series Discussion Papers with number 973.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Mar 1991
Date of revision:
Handle: RePEc:nwu:cmsems:973

Contact details of provider:
Postal: Center for Mathematical Studies in Economics and Management Science, Northwestern University, 580 Jacobs Center, 2001 Sheridan Road, Evanston, IL 60208-2014
Phone: 847/491-3527
Fax: 847/491-2530
Email:
Web page: http://www.kellogg.northwestern.edu/research/math/
More information through EDIRC

Order Information:
Email:

For technical questions regarding this item, or to correct its listing, contact: (Fran Walker).

Related research
Keywords: Discrete choice model; oligopolistic competition; multiple product firms; nested logit model.;

Other versions of this item:

References listed on IDEAS
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. Anderson, Simon P & De Palma, Andre, 1992. "The Logit as a Model of Product Differentiation," Oxford Economic Papers, Oxford University Press, vol. 44(1), pages 51-67, January. [Downloadable!] (restricted)
  2. Brander, James A & Eaton, Jonathan, 1984. "Product Line Rivalry," American Economic Review, American Economic Association, vol. 74(3), pages 323-34, June. [Downloadable!] (restricted)
    Other versions:
  3. Kenneth E. Train & Daniel L. McFadden & Moshe Ben-Akiva, 1987. "The Demand for Local Telephone Service: A Fully Discrete Model of Residential Calling Patterns and Service Choices," RAND Journal of Economics, The RAND Corporation, vol. 18(1), pages 109-123, Spring. [Downloadable!] (restricted)
  4. Caplin, Andrew & Nalebuff, Barry, 1991. "Aggregation and Imperfect Competition: On the Existence of Equilibrium," Econometrica, Econometric Society, vol. 59(1), pages 25-59, January. [Downloadable!] (restricted)
    Other versions:
  5. Martinez-Giralt, Xavier & Neven, Damien J, 1988. "Can Price Competition Dominate Market Segmentation?," Journal of Industrial Economics, Blackwell Publishing, vol. 36(4), pages 431-42, June. [Downloadable!] (restricted)
  6. Perloff, Jeffrey M & Salop, Steven C, 1985. "Equilibrium with Product Differentiation," Review of Economic Studies, Blackwell Publishing, vol. 52(1), pages 107-20, January. [Downloadable!] (restricted)
  7. Besanko, David & Perry, Martin K & Spady, Richard H, 1990. "The Logit Model of Monopolistic Competition: Brand Diversity," Journal of Industrial Economics, Blackwell Publishing, vol. 38(4), pages 397-415, June. [Downloadable!] (restricted)
  8. Deneckere, Raymond J & Rothschild, Michael, 1992. "Monopolistic Competition and Preference Diversity," Review of Economic Studies, Blackwell Publishing, vol. 59(2), pages 361-73, April. [Downloadable!] (restricted)
    Other versions:
  9. Daniel McFadden, 1977. "Modelling the Choice of Residential Location," Cowles Foundation Discussion Papers 477, Cowles Foundation, Yale University. [Downloadable!]
Full references

Cited by:
(explanations, 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. Patrick Paul Walsh & Franco Mariuzzo & Ciara Whelan, 2005. "Merger Control in Differentiated Product," Trinity Economics Papers tep10, Trinity College Dublin, Department of Economics. [Downloadable!]
    Other versions:
  2. Mariuzzo, Franco & Walsh, Patrick Paul & van Parys, Olivier, 2009. "Estimating the Price Overcharge from Cartelisation of the Irish Automobile Industry," The Economic and Social Review, Economic and Social Studies, vol. 40(2), pages 165–182. [Downloadable!]
  3. Andre dePalma & Karim Kilani, 2000. "The Optimal of Provision of Products with Income Effects," Econometric Society World Congress 2000 Contributed Papers 1299, Econometric Society. [Downloadable!]
  4. Franco Mariuzzo & Patrick Paul Walsh & Ciara Whelan, 2005. "Merger Control in Differentiated Product Industries," Working Papers 200508, School Of Economics, University College Dublin. [Downloadable!]
  5. Astrid A. Dick, 2002. "Demand estimation and consumer welfare in the banking industry," Finance and Economics Discussion Series 2002-58, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  6. L. Lambertini, 2008. "Optimal Product Proliferation in Monopoly: A Dynamic Analysis," Working Papers 648, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  7. L. Lambertini, 2000. "The Monopolist's Optimal R&D Portfolio," Working Papers 391, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
    Other versions:
  8. Minniti, Antonio, 2006. "Multi-Product Firms, R&D, and Growth," MPRA Paper 2097, University Library of Munich, Germany. [Downloadable!]
  9. Ivaldi, Marc & Verboven, Frank, 2001. "Quantifying the Effects from Horizontal Mergers in European Competition Policy," CEPR Discussion Papers 2697, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  10. S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  11. David P. Myatt & Justin P. Johnson, 2005. "Multiproduct Cournot Oligopoly," Economics Series Working Papers 145, University of Oxford, Department of Economics. [Downloadable!]
    Other versions:
  12. OTTAVIANO, Gianmarco & THISSE, Jacques-Franois, 1999. "Monopolistic competition, multiproduct firms and optimum product diversity," CORE Discussion Papers 1999019, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
    Other versions:
  13. Timothy Richards, 2007. "A nested logit model of strategic promotion," Quantitative Marketing and Economics, Springer, vol. 5(1), pages 63-91, March. [Downloadable!] (restricted)
  14. Franco Mariuzzo & Patrick Paul Walsh & Ciara Whelan, 2004. "EU Merger Control in Differentiated Product Industries," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  15. Franco Mariuzzo & Patrick Walsh & Ciara Whelan, 2003. "Firm Size and Market Power in Carbonated Soft Drinks," Review of Industrial Organization, Springer, vol. 23(3), pages 283-299, December. [Downloadable!] (restricted)
    Other versions:
  16. Richards, Timothy, 2005. "A Nested Logit Model of Strategic Promotion," 2005 Annual meeting, July 24-27, Providence, RI 19336, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  17. Lukasz Grzybowski & Pedro Pereira, 2007. "Merger Simulation in Mobile Telephony in Portugal," Review of Industrial Organization, Springer, vol. 31(3), pages 205-220, November. [Downloadable!] (restricted)
    Other versions:
  18. Rika Onishi Mortimer, 1998. "Demand for Prescription Drugs: The Effects of Managed Care Pharmacy Benefits," HEW 9802002, EconWPA. [Downloadable!]
  19. Simon P. Anderson & André de Palma, 2003. "Market Performance With Multiproduct Firms," Virginia Economics Online Papers 357, University of Virginia, Department of Economics. [Downloadable!]
  20. repec:tcd:wpaper:tep10 is not listed on IDEAS
  21. Marina Giacomo, 2008. "GMM estimation of a structural demand model for yogurt and the effects of the introduction of new brands," Empirical Economics, Springer, vol. 34(3), pages 537-565, June. [Downloadable!] (restricted)
  22. Norbert Schulz, 1992. "Special offers and clustering under symmetric monopoly," Journal of Economics, Springer, vol. 56(3), pages 311-334, October. [Downloadable!] (restricted)
  23. Fershtman, C. & Gandal, N., 1996. "The effect of the Arab boycott on Israel : the automobile market," Discussion Paper 8, Tilburg University, Center for Economic Research. [Downloadable!]
    Other versions:
Statistics
Access and download statistics

Did you know? Apart from a small start up grant in the 1990's, RePEc has received no funding and lives on the help of volunteers.

This page was last updated on 2009-11-25.


This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.