Distance, Demand, and Oligopoly Pricing

Robert C. Feenstra · James Levinsohn

13 citations0/0 files storedNational Bureau of Economic Research

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Consumer Market Behavior and Pricing Merger and Competition Analysis Economics of Agriculture and Food Markets

Abstract

We demonstrate how to estimate a model of product demand and oligopoly pricing when products are multi-dimensionally differentiated. We provide an empirical counterpart to recent theoretical work on product differentiation. Using specifications informed by economic theory, we simultaneously estimate a demand system and price-cost margins for products differentiated in many dimensions.

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