Measuring Substitution Patterns in Differentiated-Products Industries

Abstract

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Physician-Industry Interactions: Persuasion and Welfare

“…To use the variation induced by the introduction of generic atorvastatin to the choice set, we follow the suggestion of Gandhi and Houde (2016), constructing an instrument that interacts the post-entry period with indicators for Lipitor, Crestor, and the other generics,…”

Local Protectionism, Market Structure, and Social Welfare: China's Automobile Market

“…We then briefly describe how all parameters are estimated. To address both the price endogeneity arising from the correlation between prices and unobserved product attributes ξ mt j and the fact that market shares need to be "instrumented" in these nonlinear models (Berry and Haile, 2014; Gandhi and Houde, 2016), we use three sets of instruments. The first set of instruments, or the BLP instruments, includes the number of products in the same vehicle segment by the same firm and the number of products in the same vehicle segment by rival firms.…”

Sincerest Form of Flattery? Product Innovation and Imitation in the European Automobile Industry

“…I construct instruments for the HPW and KPE random coefficients by approximating the 'optimal instruments' of Chamberlain [1987] using 'differentiation IVs' introduced by Gandhi and Houde [2015]. 25 The idea is to use the distributions of product characteristics to identify Σ by constructing cdf's for each continuous characteristic based on the distances in the Consumer Income (in 1994Euros) 19921993199419951996199819992000 Average…”

“… See Reynaert and Verboven [2013] andGandhi and Houde [2015] for a further discussion on instruments and identification in random coefficient logit demand systems.…”