Distance, demand, and oligopoly pricing
1989
Feenstra, Robert C. | Levinsohn, James Alan
We demonstrate how to estimate a model of product demand and oligopoly pricing when products are multi-dimensionally differentiated. We provide an empirical counterpart to recent theoretical work on product differentiation. Using specifications informed by economic theory, we simultaneously estimate a demand system and price-cost margins for products differentiated in many dimensions.
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