Conduct Parameter Estimation in Homogeneous Goods Markets with Equilibrium Existence and Uniqueness Conditions: The Case of Log-linear Specification

Yuri Matsumura and Suguru Otani

Papers from arXiv.org

Abstract: We propose a constrained generalized method of moments estimator (GMM) incorporating theoretical conditions for the unique existence of equilibrium prices for estimating conduct parameters in a log-linear model with homogeneous goods markets. First, we derive such conditions. Second, Monte Carlo simulations confirm that in a log-linear model, incorporating the conditions resolves the problems of implausibly low or negative values of conduct parameters.

Date: 2024-07
New Economics Papers: this item is included in nep-dcm, nep-ecm and nep-inv
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