On the Identification of the Costs of Simultaneous Search
This 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.
|Date of creation:||Jul 2010|
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- Jun B. Kim & Paulo Albuquerque & Bart J. Bronnenberg, 2010. "Online Demand Under Limited Consumer Search," Marketing Science, INFORMS, vol. 29(6), pages 1001-1023, 11-12.
- Han Hong & Matthew Shum, 2006. "Using price distributions to estimate search costs," RAND Journal of Economics, RAND Corporation, vol. 37(2), pages 257-275, 06.
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