Jeziorski, Przemyslaw; Leng, Dingzhe; Seiler, Stephan - 2025 - This draft: May 10, 2025
We study the estimation of causal treatment effects on demand when treatment is randomly assigned but prices adjust in response to treatment. We show that regressions of demand on treatment or on treatment and price lead to biased estimates of the direct treatment effect. The bias in both cases...