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A simplified mixed logit demand model with an application to the simulation of entry

Author

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  • Sergio Aquino DeSouza

    (Universidade Federal do Ceara)

Abstract

Given additional information on economic meaningful measures, such as price elasticity or margin, this paper proposes an alternative empirical approach to determine the parameters of a simplified (aggregate) Mixed Logit Model. This empirical method is particularly useful when valid instruments are difficult to find. The model is applied to uncover the demand parameters and simulate the competitive and welfare effects of the introduction of new products in the ready-to-eat cereal industry in the U.S.

Suggested Citation

  • Sergio Aquino DeSouza, 2015. "A simplified mixed logit demand model with an application to the simulation of entry," Economics Bulletin, AccessEcon, vol. 35(4), pages 2333-2344.
    • Handle: RePEc:ebl:ecbull:eb-15-00155
    as

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    References listed on IDEAS

    as
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    6. Nevo, Aviv, 2001. "Measuring Market Power in the Ready-to-Eat Cereal Industry," Econometrica, Econometric Society, vol. 69(2), pages 307-342, March.
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    More about this item

    Keywords

    Demand; Discrete-Choice; Differentiated Product; Entry;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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    Access and download statistics

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