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Resolving the Conflict on Conduct Parameter Estimation in Homogeneous Goods Markets between Bresnahan (1982) and Perloff and Shen (2012)

Yuri Matsumura, Suguru Otani

arXiv 17 Jan 2023 · Econometrics · publishedEconomics Letters (2023) · 1 citations (OpenAlex)

arXiv:2301.06665 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We revisit conduct parameter estimation in homogeneous goods markets to resolve the conflict between Bresnahan (1982) and Perloff and Shen (2012) regarding the identification and the estimation of conduct parameters. We point out that Perloff and Shen's (2012) proof is incorrect and its simulation setting is invalid. Our simulation shows that estimation becomes accurate when demand shifters are properly added in supply estimation and sample sizes are increased, supporting Bresnahan (1982).

Citation extraction

13
references
21
in-text mentions
13
distinct cited
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self-citations
1,639
main-text words

appendix boundary found by appendix_command · 56% of the source is main text. Read the extracted text to check this.

Most heavily cited references

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.

ReferenceIntensityMentionsSectionsMain text
1Bresnahan (1982) The oligopoly solution concept is identified1.00073100%
2Perloff and Shen (2012) Collinearity in linear structural models of market power0.73732100%
3Berry and Haile (2014) Identification in differentiated products markets using market level data0.40511100%
4Claessens and Laeven (2004) What Drives Bank Competition? Some International Evidence0.40511100%
5Coccorese and Pellecchia (2013) Multimarket Contact, Competition and Pricing in Banking0.40511100%
6Coccorese, Girardone and Shaffer (2021) What Affects Bank Market Power in the Euro Area? A Country-Level Structural Model Approach0.40511100%
7Garcia, Kutlu and Sickles (2020) Market Structures in Production Economics0.40511100%
8Kumbhakar, Baardsen and Lien (2012) A New Method for Estimating Market Power with an Application to Norwegian Sawmilling0.40511100%
9Lau (1982) On identifying the degree of competitiveness from industry price and output data0.40511100%
10Magnolfi, Quint, Sullivan and Waldfogel (2022) Falsifying Models of Firm Conduct0.40511100%

Showing the top 10 of 13 scored citations.

Cited by, within the corpus

arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.

Citing paperIntensityMentionsSections
1Challenges in Statistically Rejecting the Perfect Competition Hypothesis Using Imperfect Competition Data0.64432
2Conduct Parameter Estimation in Homogeneous Goods Markets with Equilibrium Existence and Uniqueness Conditions: The Case of Log-linear Specification0.60662
3Revisiting the Identification of the Conduct Parameter in Homogeneous Goods Markets0.40511