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On the identification of the costs of simultaneous search

Author

Listed:
  • Moraga-Gonzalez, Jose L.

    (IESE Business School)

  • Sandor, Zsolt

    (University of Groningen)

  • Wildenbeest, Matthijs R.

    (Kelley School of Business)

Abstract

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.

Suggested Citation

  • Moraga-Gonzalez, Jose L. & Sandor, Zsolt & Wildenbeest, Matthijs R., 2010. "On the identification of the costs of simultaneous search," IESE Research Papers D/867, IESE Business School.
    • Handle: RePEc:ebg:iesewp:d-0867
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    References listed on IDEAS

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    1. James Albrecht & Pieter A. Gautier & Susan Vroman, 2006. "Equilibrium Directed Search with Multiple Applications," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(4), pages 869-891.
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    5. Simon P. Anderson & Regis Renault, 1999. "Pricing, Product Diversity, and Search Costs: A Bertrand-Chamberlin-Diamond Model," RAND Journal of Economics, The RAND Corporation, vol. 30(4), pages 719-735, Winter.
    6. Philipp Kircher, 2009. "Efficiency of Simultaneous Search," Journal of Political Economy, University of Chicago Press, vol. 117(5), pages 861-913, October.
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    8. José Luis Moraga‐González & Zsolt Sándor & Matthijs R. Wildenbeest, 2013. "Semi‐Nonparametric Estimation Of Consumer Search Costs," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(7), pages 1205-1223, November.
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    Cited by:

    1. Lu, Zhentong, 2022. "Estimating multinomial choice models with unobserved choice sets," Journal of Econometrics, Elsevier, vol. 226(2), pages 368-398.

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    More about this item

    Keywords

    search costs; portfolio choice; non-parametric identification;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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