This paper develops a new likelihood-based method for the simultaneous estimation of structural demand-and-supply models for markets with differentiated products. We specify an individual-level discrete-choice model of demand and derive the supply side assuming manufacturers compete in prices....

Firms often differentiate their product lines vertically to capture consumers' differential willingness to pay for quality. Additionally, many firms offer products varying not in quality but in characteristics such as scent, color, or flavor, that relate to horizontal differentiation. For...