arXiv 13 Feb 2018 · Econometrics
arXiv:1802.04444 · PDF · DOI · OpenAlex · Extracted main text
This paper describes a numerical method to solve for mean product qualities which equates the real market share to the market share predicted by a discrete choice model. The method covers a general class of discrete choice model, including the pure characteristics model in Berry and Pakes(2007) and the random coefficient logit model in Berry et al.(1995) (hereafter BLP). The method transforms the original market share inversion problem to an unconstrained convex minimization problem, so that any convex programming algorithm can be used to solve the inversion. Moreover, such results also imply that the computational complexity of inverting a demand model should be no more than that of a convex programming problem. In simulation examples, I show the method outperforms the contraction mapping algorithm in BLP. I also find the method remains robust in pure characteristics models with near-zero market shares.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Berry, Levinsohn and Pakes (1995) Automobile Prices in Market Equilibrium | 0.843 | 3 | 3 | 100% |
| 2 | Berry and Pakes (2007) The Pure Characteristics Demand Model | 0.737 | 3 | 2 | 100% |
| 3 | Dubé, Fox and Su (2012) Improving the Numerical Performance of Static and Dynamic Aggregate Discrete Choice Random Coefficients Demand Estimation | 0.644 | 2 | 2 | 100% |
| 4 | Fletcher (1987) | 0.644 | 2 | 2 | 100% |
| 5 | Conn, Gould and Toint (2000) | 0.405 | 1 | 1 | 100% |
| 6 | Ruszczyński (2006) | 0.405 | 1 | 1 | 100% |
| 7 | Shultz, Schnabel and Byrd (1985) A Family of Trust-Region-Based Algorithms for Unconstrained Minimization with Strong Global Convergence Properties | 0.405 | 1 | 1 | 100% |
| 8 | Song (2006) Estimating the Pure Characteristics Demand Model: A Computational Note | 0.405 | 1 | 1 | 100% |
| 9 | Bertsekas (1973) Stochastic optimization problems with nondifferentiable cost functionals | 0.000 | 2 | 1 | 0% |
| 10 | Rockafellar (1997) | 0.000 | 1 | 1 | 0% |
Showing the top 10 of 10 scored citations.