The flexible coefficient multinomial logit (FC-MNL) model of demand for differentiated products.

We show FC-MNL is flexible in the sense of Diewert (), thus its parameters can be chosen to match a well-defined class of possible own- and cross-price elasticities of demand. In contrast to models such as Probit and Random Coefficient-MNL models, FC-MNL does not require estimation via simulation; i...

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Publicado en:RAND Journal of Economics (Wiley-Blackwell) Vol. 45; no. 1; pp. 32 - 64
Autores principales: Davis, Peter, Schiraldi, Pasquale
Formato: Artículo
Publicado: Wiley-Blackwell Spring2014
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Acceso en línea:Ver este registro en EBSCOhost
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        atl: The flexible coefficient multinomial logit (FC-MNL) model of demand for differentiated products.
      aug:
        au:
          Davis, Peter
          Schiraldi, Pasquale
        affil:
          Compass Lexecon and University College London Faculty of Laws
          London School of Economics and Political Science & CEPR
      su:
        Consumers
        Economic demand
        Multilevel models
        Monte Carlo method
        Discrete choice models
        Automobiles
      sug:
        subj:
          Consumers
          Economic demand
          Automobile and Other Motor Vehicle Merchant Wholesalers
          New Car Dealers
          New and used automobile and light-duty truck merchant wholesalers
          Automotive Body, Paint, and Interior Repair and Maintenance
          All Other Automotive Repair and Maintenance
          Automobile Manufacturing
          Automobile and light-duty motor vehicle manufacturing
          Multilevel models
          Monte Carlo method
          Discrete choice models
          Automobiles
      ab: We show FC-MNL is flexible in the sense of Diewert (), thus its parameters can be chosen to match a well-defined class of possible own- and cross-price elasticities of demand. In contrast to models such as Probit and Random Coefficient-MNL models, FC-MNL does not require estimation via simulation; it is fully analytic. Under well-defined and testable parameter restrictions, FC-MNL is shown to be an unexplored member of McFadden's class of Multivariate Extreme Value discrete-choice models. Therefore, FC-MNL is fully consistent with an underlying structural model of heterogeneous, utility-maximizing consumers. We provide a Monte-Carlo study to establish its properties and we illustrate its use by estimating the demand for new automobiles in Italy.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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