Calibrating the AIDS and Multinomial Logit Models with Observed Product Margins

We show how observed product margins may be used in lieu of an observed market elasticity to calibrate parameters for two commonly used demand forms: the Almost Ideal Demand System (AIDS) and the multinomial logit. This technique is useful for antitrust practitioners interested in simulating the e ects of a merger, since estimates of product margins are often easier to obtain than estimates of market elasticities.

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Year of publication:	2012-10
Authors:	Sheu, Gloria ; Taragin, Charles
Institutions:	Antitrust Division, Department of Justice
Subject:	demand calibration \| multinomial logit \| almost ideal demand system \| AIDS

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Extent:	text/html
Series:	EAG Discussions Papers.
Type of publication:	Book / Working Paper
Notes:	Number 201207 12 pages
Classification:	L40 - Antitrust Policy. General ; K21 - Antitrust Law
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10010584448