Affiliation:
1. CREST
2. Université Toulouse Capitole
Abstract
Abstract
In markets where sellers are able to price discriminate, individuals pay different prices that may be unobserved by the econometrician. This article considers the structural estimation of a demand and supply model of differentiated products with such price discrimination and limited information on prices taking the form of, e.g., observing list prices from catalogues or average prices. Within this framework, identification is achieved not only with usual moment conditions on the demand side, but also through supply-side restrictions. The model can be estimated by GMM using a nested fixed point algorithm that extends the usual contraction mapping algorithm to our setting. We apply our methodology to estimate the demand and supply in the French new automobile market. Our results suggest that discounting arising from price discrimination is important. The average discount is estimated to be 9.6%, with large variation depending on buyers’ characteristics and cars’ specifications. Our results are consistent with other evidence on transaction prices in France.
Publisher
Oxford University Press (OUP)
Subject
Economics and Econometrics
Reference39 articles.
1. Gasoline Prices, Fuel Economy, and the Energy Paradox”;ALLCOTT,;Review of Economics and Statistics,2014
2. Large Market Asymptotics for Differentiated Product Demand Estimators with Economic Models of Supply”;ARMSTRONG,;Econometrica,2016
3. Race and Gender Discrimination in Bargaining for a New Car”;AYRES,;The American Economic Review,1995
4. Estimating discrete-choice models of product differentiation”;BERRY,;The RAND Journal of Economics,1994
5. Identification in Differentiated Products Markets Using Market Level Data”;BERRY,;Econometrica,2014
Cited by
11 articles.
订阅此论文施引文献
订阅此论文施引文献，注册后可以免费订阅5篇论文的施引文献，订阅后可以查看论文全部施引文献