Victor Aguirregabiria, Alessandro Iaria, Senay Sokullu
arXiv 27 Aug 2023 · Econometrics · 2 citations (OpenAlex)
arXiv:2308.14196 · PDF · DOI · OpenAlex · Extracted main text
This paper deals with the endogeneity of firms' entry and exit decisions in demand estimation. Product entry decisions lack a single crossing property in terms of demand unobservables, which causes the inconsistency of conventional methods dealing with selection. We present a novel and straightforward two-step approach to estimate demand while addressing endogenous product entry. In the first step, our method estimates a finite mixture model of product entry accommodating latent market types. In the second step, it estimates demand controlling for the propensity scores of all latent market types. We apply this approach to data from the airline industry.
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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 | Ciliberto, Federico and Murry, Charles and Tamer, Elie (2021) Market structure and competition in airline markets | 1.000 | 13 | 3 | 100% |
| 2 | Li, Sophia and Mazur, Joe and Park, Yongjoon and Roberts, James and… (2022) Repositioning and market power after airline mergers | 1.000 | 8 | 3 | 100% |
| 3 | Newey, Whitney (2009) Two-step series estimation of sample selection models | 0.935 | 11 | 5 | 82% |
| 4 | Das, Mitali and Newey, Whitney and Vella, Francis (2003) Nonparametric estimation of sample selection models | 0.935 | 11 | 4 | 82% |
| 5 | Aguirregabiria, Victor and Ho, Chun-Yu (2012) A dynamic oligopoly game of the US airline industry: Estimation and policy experiments self | 0.874 | 6 | 2 | 100% |
| 6 | Eizenberg, Alon (2014) Upstream innovation and product variety in the us home pc market | 0.874 | 5 | 2 | 100% |
| 7 | Sweeting, Andrew (2013) Dynamic product positioning in differentiated product markets: The effect of fees for musical performance rights on the commerci… | 0.874 | 5 | 2 | 100% |
| 8 | Angrist, Joshua D (1997) Conditional independence in sample selection models | 0.737 | 3 | 2 | 100% |
| 9 | Berry, Steven and Levinsohn, James and Pakes, Ariel (1995) Automobile prices in market equilibrium | 0.737 | 3 | 2 | 100% |
| 10 | Bontemps, Christian and Gualdani, Cristina and Remmy, Kevin (2023) Price competition and endogenous product choice in networks: Evidence from the us airline industry | 0.737 | 3 | 2 | 100% |
Showing the top 10 of 59 scored citations.
arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.
| Citing paper | Intensity | Mentions | Sections | |
|---|---|---|---|---|
| 1 | Demand Analysis under Price Rigidity and Endogenous Assortment: An Application to China's Tobacco Industry | 0.405 | 1 | 1 |