A Simplified Mixed Logit Demand Model with an Application to the Simulation of Entry

Sergio Aquino de Souza

No 04-2011, Working Papers from Universidade de São Paulo, Faculdade de Economia, Administração e Contabilidade de Ribeirão Preto

Abstract: The key contribution of this paper is to show how to incorporate more information into the empirical strategy in order to avoid the need of valid instruments, which are difficult to find in many instances. I use information on price elasticity to propose a methodology that is able to determine the parameters of a simplified Mixed Logit Model. I also apply this methodology to the ready-to-eat cereal industry and simulate the competitive and welfare effects of the introduction of new products.

Keywords: Discrete-Choice; Demand Models; Competition (search for similar items in EconPapers)
JEL-codes: D12 L11 (search for similar items in EconPapers)
Date: 2011
New Economics Papers: this item is included in nep-com, nep-dcm, nep-ind and nep-mkt
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