Empirical properties of diversion ratios

• 成果类型: Article
• 署名作者: Conlon, Christopher; Mortimer, Julie Holland
• 署名单位: New York University; National Bureau of Economic Research; Boston College
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12388
• 发表日期: 2021
• 页码: 693-726
• 关键词: differentiated products; market power; provider networks; demand; mergers; models; identification; COMPETITION; variables; EQUATIONS

摘要

The diversion ratio for products j and k is the fraction of consumers who leave product j after a price increase and switch to product k. Theoretically, it is expressed as the ratio of demand derivatives from a multi-product firm's Bertrand-Nash first-order condition. In practice, diversion ratios are also measured from second-choice data or customer-switching surveys. We establish a LATE interpretation of diversion ratios, and show how diversion ratios are obtained from different interventions (price, quality, or assortment changes) and how those measures relate to one another and to underlying properties of demand.