... result from a brand’s image.
Suppose we face a market with two differentiated goods and the following linear
demand system:
Demand for good 1: q
1
D a
1
b
11
p
1
C b
12
p
2
;
Demand for good 2: ... products and can be shared. For instance, once the reputation
embodied in a brand name has been built, it can be cheaper for a firm to launch other
successful products under that same...
... in
Fisher (1980, 1986) and Finkelstein and Levenbach (1983). For more general econometrics texts, see, for
example, Greene (2007) and Wooldridge (2007). And for an advanced and more technical but ... “reduced-form” equations. Estimating a reduced
form for market prices and quantities will require data on equilibrium prices and
quantities in that market as dependent varia...
... price and
quantity data alone it is impossible to empirically quantify the effect of an increase
in prices on the quantity demanded and therefore to extract information such as the
demand elasticity.
A ... in matrix form and stack the sets of observations in their groups
and note that the resulting matrices X
g
and X
h
will satisfy X
0
g
X
h
D 0 for g ¤ h
because d
ig
d
ih
D 0 (se...
... marginal
customers—those for whom store A and store B are pretty close substitutes for one
another but before the price rise at A there was a small preference for going to A.
On the other hand, the CC’s ... the prices depend on the intercepts of the demand equations (a
1
and
a
2
), the own-price effects (b
11
and b
22
), and the cross-price effects (b
12
and b
21
).
They also...
... information about demand and in particular the own-price elastic-
40
This section draws on Harris and Simons (1989) and also the working papers by O’Brien and
Wickelgren (2003) and by Katz and ... demand curve.
First, following Landes and Posner (1981) and Scheffman and Spiller (1987)
consider the dominant-firm model. In that model, the dominant firm faced a mar-
ket demand D...
... to allow for
firm heterogeneity and Mazzeo (2002) and Seim (2006) extended the analysis and
estimation of entrygames to allow for product differentiation. Davis (2006c) allowed
for some forms of ... jurisdictions.
4
See, for example, the work by Sutton (1991), Klepper (1996), and Klepper and Simons (2000), and
in the strategy literature see Markides and Geroski (2005)...
... firm and market demand for understanding competition. For example,
we have seen that demand is important in determining firm behavior such as pricing
decisions and we have also seen that demand ... demand for sugar and for
that purpose we have collected data on the quantity of sugar sold in millions of
pounds and the price at which they were sold in cents per pounds. The first s...
... alternative functional form. For
example, Berry et al. (1995) believe that the demand for a type of car will depend
on a consumer’s level of income and work with the natural logarithm formulation,
v
j
.y ... elasticity of segment
demand is 2:6 for premium beer, 2:7 for popular beer, and 2:4 for light beer.
These price elasticities could be used as important evidence toward a...
... 519
10.2.1 Informal and Semiformal Analysis of Incentives
Informal quantitative analysis can sometimes be insightful for evaluating the incen-
tive for foreclosure. An example of such an analysis ... strategies in the rest of this chapter. Before doing so we briefly
discuss informal and semiformal quantitative methods for evaluating the incentive
for foreclosure.
10.2. Me...
... small.
For Lara, Adrian, and Tristan
For Sara
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Quantitative Techniques for
Competition and Antitrust Analysis
8 1. The Determinants of Market Outcomes
Demand at ... since understanding these
key elements of economic analysis is crucial for an appropriate use of quantitative
techniques.
1.1 Demand Functions and Demand Elasticities...