Identification in Differentiated Products Markets

Steven Berry () and Philip Haile

Annual Review of Economics, 2016, vol. 8, issue 1, 27-52

Abstract: Empirical models of differentiated products demand (and often supply) are widely used in industrial organization and other fields of economics. We review some recent work studying identification in a broad class of such models. This work shows that the parametric functional forms and distributional assumptions commonly used for estimation are not essential for identification. Rather, identification relies primarily on the standard requirement that instruments be available for the endogenous variables—here, typically, prices and quantities. We discuss the types of instruments that can suffice, as well as how instrumental variables requirements can be relaxed by the availability of individual-level data or through restrictions on preferences. We also review new results on discrimination between alternative models of oligopoly competition. Together, these results reveal a strong nonparametric foundation for a broad applied literature, provide practical guidance for applied work, and may suggest new approaches to estimation and testing.

Keywords: nonparametric identification; instrumental variables; discrete choice; differentiated products oligopoly; demand and supply; firm conduct (search for similar items in EconPapers)
JEL-codes: C14 C3 C5 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (28)

Downloads: (external link)
http://www.annualreviews.org/doi/10.1146/annurev-economics-080315-015050 (application/pdf)
Full text downloads are only available to subscribers. Visit the abstract page for more information.

Related works:
Working Paper: Identification in differentiated product markets (2015)
Working Paper: Identification in Differentiated Products Markets (2015)
Working Paper: Identification in differentiated product markets (2015)
Working Paper: Identification in Differentiated Products Markets (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:anr:reveco:v:8:y:2016:p:27-52

Ordering information: This journal article can be ordered from
http://www.annualreviews.org/action/ecommerce

Access Statistics for this article

More articles in Annual Review of Economics from Annual Reviews Annual Reviews 4139 El Camino Way Palo Alto, CA 94306, USA.
Bibliographic data for series maintained by http://www.annualreviews.org ().