The flexible coefficient multinomial logit (FC-MNL) model of demand for differentiated products

• 成果类型: Article
• 署名作者: Davis, Peter; Schiraldi, Pasquale
• 署名单位: University of London; University College London; University of London; London School Economics & Political Science; Centre for Economic Policy Research - UK
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12041
• 发表日期: 2014
• 页码: 32-63
• 关键词: choice; COMPETITION; identification; Heterogeneity; mergers

摘要

We show FC-MNL is flexible in the sense of Diewert (), thus its parameters can be chosen to match a well-defined class of possible own- and cross-price elasticities of demand. In contrast to models such as Probit and Random Coefficient-MNL models, FC-MNL does not require estimation via simulation; it is fully analytic. Under well-defined and testable parameter restrictions, FC-MNL is shown to be an unexplored member of McFadden's class of Multivariate Extreme Value discrete-choice models. Therefore, FC-MNL is fully consistent with an underlying structural model of heterogeneous, utility-maximizing consumers. We provide a Monte-Carlo study to establish its properties and we illustrate its use by estimating the demand for new automobiles in Italy.