Distance, Demand, and Oligopoly Pricing
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 Economic Studies, vol. 62, pp 19-52, 1995.