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Semi‐structural models of advertising competition
Author(s) -
Pinkse Joris,
Slade Margaret
Publication year - 2007
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.983
Subject(s) - competition (biology) , discrete choice , set (abstract data type) , estimator , microeconomics , economics , mathematical economics , sequential game , structural estimation , computer science , econometrics , game theory , mathematics , ecology , statistics , biology , programming language
We propose a semi‐structural discrete‐choice model that can be used to estimate static or dynamic decision rules. It is particularly useful in strategic contexts when games involve a rich set of choices, when private information is correlated, and when one wants to uncover the effect of historic behavior (on, for example, prices, sales, and profits). We apply our discrete‐choice estimator to study decision rules for a dynamic game of price and advertising competition, and we evaluate the long‐run consequences of those rules. Copyright © 2007 John Wiley & Sons, Ltd.