Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

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Thursday, November 3, 2011

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

Posted by D. Daniel Sokol

Sergio Aquino de Souza (CADE) has written on A Simplified Mixed Logit Demand Model with an Application to the Simulation of Entry.

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.

http://lawprofessors.typepad.com/antitrustprof_blog/2011/11/a-simplified-mixed-logit-demand-model-with-an-application-to-the-simulation-of-entry-.html

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