NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Distance, Demand, and Oligopoly Pricing

Robert C. Feenstra, James A. Levinsohn

NBER Working Paper No. 3076*
Issued in August 1989
NBER Program(s):   ITI    IFM

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.

*Published: "Estimating Markups and Market Conduct with Multidimensional Product Attributes," Review of Ecomomic Studies, vol. 62, pp 19-52, 1995.

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