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Estimates from a structural model of consumer behavior and firm conduct are used to decompose the extent to which quantity discounts for paper towels are consistent with second degree price discrimination as opposed to cost differences across sizes. Counterfactual exercises assuming that firms...
Persistent link: https://www.econbiz.de/10005500178
The standard approach to identifying second degree price discrimination is based on examining correlations between product menus and prices. When product menus are endogenous, however, tests for price discrimination may be biased by the fact that unobservables affecting costs or demand may...
Persistent link: https://www.econbiz.de/10005512978
This paper introduces a simple method to test between two general approaches to defining bank and thrift product markets. I estimate two models that endogenize market structure using data on banks and thrifts from 1,884 rural markets for the year 2000. The first model assumes that banks and...
Persistent link: https://www.econbiz.de/10005514150
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We consider a simple model of market structure determination with discrete product differentiation and strategic interaction between firms. Our equilibrium concept is based on a set of relatively weak conditions that describe the profits of active and potential firms in a market. In our model,...
Persistent link: https://www.econbiz.de/10005085438
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This note presents a simple algorithm for characterizing the set of pure strategy Nash equilibria in a broad class of entry games. The algorithm alleviates much of the computational burden associated with recently developed econometric techniques for estimating payoff functions inferred from...
Persistent link: https://www.econbiz.de/10005721019
We analyze the effects of market structure on the branching decisions of three types of depository institution: multimarket banks, single-market banks, and thrift institutions. We argue that additional branches increase quality for an institution's consumers, and examine the interaction between...
Persistent link: https://www.econbiz.de/10005721073
Recently developed econometric techniques for estimating the parameters of entry games with multiple equilibria suffer significant computational constraints associated with calculating upper and lower bound entry probabilities. We provide simulation-based and analytical expressions for these...
Persistent link: https://www.econbiz.de/10008494893