Calendrier du 26 novembre 2015
RISK Working Group
Du 26/11/2015 de 17:00 à 18:15
Campus jourdan,Bâtiment A, Rez de chaussée, Salle 4
DORMONT Brigitte (PSL, UNIVERSITé PARIS DAUPHINE)
Price elasticity of demand for balance billing : coverage choices and moral hazard
écrit avec Mathilde PÉRON
Macroeconomics Seminar
Du 26/11/2015 de 16:30 à 17:45
Maison des Sciences Economiques, 6th floor conference room
BOPPART Timo (IIES)
Macro Workshop
Du 26/11/2015 de 15:00 à 16:00
MSE Campus (106-112 boulevard de l’Hôpital, 75013 Paris), room B. 3.1
PRATAP Sangeeta (HUNTER COLLEGE AND GRADUATE CENTER CITY UNIVERSITY OF NY)
TOM (Théorie, Organisation et Marchés) Lunch Seminar
Du 26/11/2015 de 12:45 à 13:45
Campus jourdan, Bâtiment G, Rez de chaussée, Salle 10
IARIA Alessandro (CREST)
Estimating Demand Parameters with Choice Set Misspecification
We describe methods to estimate demand parameters in the presence of choice set misspecification due to unobserved individual choice sets. We show that a consumer’s probability of making
a choice from her true choice set can be written as the probability she makes the same choice
from a universal choice set, an assumption commonly made in the empirical literature, less a
bias term capturing the probability that she would choose any of the elements in her true choice
set. We show how to estimate models that avoid this bias under Logit demand using “sufficient
sets,” instances where (observationally identical) individuals make at least two choices from the
same unobserved choice set. Examples of sufficient sets include a variation of the Fixed Effect
Logit approach due to Chamberlain (1980), using observed individual-specific purchase histories, and assuming
common unobserved choice sets across individual purchases in a given retailer and time period.
We illustrate these ideas using household-level scanner data exploiting variation in choice sets
based on the introduction of a new product variety and heterogeneous product offerings across stores in the market for ketchup in the UK. Our results show that accounting for choice set
misspecification is critical for accurately estimating own- and cross-price elasticities of demand.