Marco Duarte, Lorenzo Magnolfi, Mikkel Sølvsten, Christopher Sullivan
arXiv 17 Jan 2023 · Econometrics · publishedQuantitative Economics (2024) · 20 citations (OpenAlex)
arXiv:2301.06720 · PDF · DOI · OpenAlex · Extracted main text
Evaluating policy in imperfectly competitive markets requires understanding firm behavior. While researchers test conduct via model selection and assessment, we present advantages of Rivers and Vuong (2002) (RV) model selection under misspecification. However, degeneracy of RV invalidates inference. With a novel definition of weak instruments for testing, we connect degeneracy to instrument strength, derive weak instrument properties of RV, and provide a diagnostic for weak instruments by extending the framework of Stock and Yogo (2005) to model selection. We test vertical conduct (Villas-Boas, 2007) using common instrument sets. Some are weak, providing no power. Strong instruments support manufacturers setting retail prices.
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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 | Backus, M., C. Conlon, and M. Sinkinson (2021) Common Ownership and Competition in the Ready-To-Eat Cereal Industry, NBER working paper #28350 | 1.000 | 7 | 5 | 100% |
| 2 | Vuong, Q (1989) Likelihood Ratio Tests for Model Selection and Non-Nested Hypotheses | 1.000 | 6 | 3 | 100% |
| 3 | Villas-Boas, S (2007) Vertical Relationships between Manufacturers and Retailers: Inference with Limited Data | 0.979 | 16 | 6 | 94% |
| 4 | Berry, S. and P. Haile (2014) Identification in Differentiated Products Markets Using Market Level Data | 0.941 | 18 | 9 | 83% |
| 5 | Rivers, D. and Q. Vuong (2002) Model Selection Tests for Nonlinear Dynamic Models | 0.941 | 6 | 5 | 83% |
| 6 | Miller, N. and M. Weinberg (2017) Understanding the Price Effects of the MillerCoors Joint Venture | 0.928 | 4 | 4 | 100% |
| 7 | Stock, J. and M. Yogo (2005) Testing for Weak Instruments in Linear IV Regression, in | 0.874 | 7 | 2 | 100% |
| 8 | Bresnahan, T (1982) The Oligopoly Solution Concept is Identified | 0.763 | 6 | 2 | 67% |
| 9 | Hansen, P., A. Lunde, and J. Nason (2011) The Model Confidence Set | 0.737 | 3 | 2 | 100% |
| 10 | Nevo, A (2001) Measuring Market Power in the Ready-to-Eat Cereal Industry | 0.737 | 3 | 2 | 100% |
Showing the top 10 of 56 scored citations.
arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.
| Citing paper | Intensity | Mentions | Sections | |
|---|---|---|---|---|
| 1 | Challenges in Statistically Rejecting the Perfect Competition Hypothesis Using Imperfect Competition Data | 0.405 | 1 | 1 |
| 2 | Revisiting the Identification of the Conduct Parameter in Homogeneous Goods Markets | 0.405 | 1 | 1 |