Horrace, William; Huang, Rui; Perloff, Jeffrey M. - Center for Policy Research, Maxwell School - 2013
We use order statistics to analytically derive demand functions when consumers choose from among the varieties of two brands—such as Coke and Pepsi—and an outside good. Soft-drinks have no price variability across varieties within a brand, so traditional demand systems (e.g., mixed logit)...