An aggregative approach to pricing equilibrium among multi‐product firms with nested demand.
I show equilibrium existence for a price‐setting game among multi‐product firms facing a nested logit/CES demand. As opposed to previous research I allow arbitrary firm/nest overlap, making the result relevant for applied work. Additionally, under easy‐to‐verify conditions, I show that there exist e...
| Published in: | RAND Journal of Economics (Wiley-Blackwell) Vol. 55; no. 3; pp. 359 - 375 |
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| Format: | Article |
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Wiley-Blackwell
Sep2024
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| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=180608070&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 180608070 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 07416261 56RJ jtl: RAND Journal of Economics (Wiley-Blackwell) issn: 07416261 maglogo: Y pubinfo: dt: Sep2024 vid: 55 iid: 3 pid: 480 pub: Wiley-Blackwell artinfo: ui: 180608070 10.1111/1756-2171.12472 ppf: 359 ppct: 16 formats: fmt: – @attributes: type: T – @attributes: type: C – @attributes: type: P size: 310KB tig: atl: An aggregative approach to pricing equilibrium among multi‐product firms with nested demand. aug: au: Garrido, Francisco affil: Department of Business Administration, ITAM su: Consumer preferences Prices Job applications Nash equilibrium Direct costing sug: subj: Consumer preferences Prices Job applications Nash equilibrium Direct costing keyword: aggregative games Nash equilibrium existence nested CES nested logit aggregative games Nash equilibrium existence nested CES nested logit ab: I show equilibrium existence for a price‐setting game among multi‐product firms facing a nested logit/CES demand. As opposed to previous research I allow arbitrary firm/nest overlap, making the result relevant for applied work. Additionally, under easy‐to‐verify conditions, I show that there exist extreme equilibria, which are the most and least preferred by consumers, and provide an algorithm to find them. This allows researcher to numerically verify equilibrium uniqueness in applications, that is, if the extreme equilibria are equal to each other. As a by‐product, I show that inverting FOCs correctly identifies the marginal costs that rationalize observed prices. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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