The Inverse Product Differentiation Logit Model
André de Palma (),
Mogens Fosgerau and
Julien Monardo ()
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Julien Monardo: Université de Cergy-Pontoise, THEMA
No 2021-04, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise
We propose the Inverse Product Differentiation Logit (IPDL) model, a structural (inverse) demand model for differentiated products that captures market segmentation with segments that may overlap in any way. The IPDL model generalizes the nested logit model to allow richer substitution patterns, including complementarity in demand, and can be estimated by linear instrumental variable regression using aggregate data. We use the IPDL model to estimate the demand for cereals in Chicago. We then extend it to a general demand model that is consistent with a utility model of heterogeneous, utilitymaximizing consumers.
JEL-codes: C26 D11 D12 L (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-dcm, nep-ind, nep-ore and nep-upt
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Working Paper: The Inverse Product Differentiation Logit Model (2022)
Working Paper: The Inverse Product Differentiation Logit Model (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2021-04
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