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Discrete choice models for multicategory goods

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  • Yukihiro Kidokoro

    (National Graduate Institute for Policy Studies)

Abstract

Although discrete choice models are well suited to describing the demand structure of differentiated goods, two important problems remain unsolved in their application. First, the total demand for a choice set is exogenously fixed. Second, multiple categories of goods cannot be handled in an unrestrictive way. In this paper, we address these flaws by formulating a complete utility maximization problem that is consistent with discrete choice models and derive the implications for applied research. We then apply the results to the ketchup and mayonnaise markets and investigate the differences arising from the consideration of multiple categories of goods.

Suggested Citation

  • Yukihiro Kidokoro, 2015. "Discrete choice models for multicategory goods," GRIPS Discussion Papers 15-08, National Graduate Institute for Policy Studies.
    • Handle: RePEc:ngi:dpaper:15-08
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    References listed on IDEAS

    as
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