Large Market Asymptotics for Differentiated Product Demand Estimators with Economic Models of Supply

@inproceedings{Armstrong2012LargeMA,
  title={Large Market Asymptotics for Differentiated Product Demand Estimators with Economic Models of Supply},
  author={Timothy Armstrong},
  year={2012}
}
IO economists often estimate demand for differentiated products using data sets with a small number of large markets. This paper addresses the question of consistency and asymptotic distributions of IV estimates as the number of products increases in some commonly used models of demand under conditions on economic primitives. I show that, in a Bertrand-Nash equilibrium, product characteristics lose their identifying power as price instruments in the limit in many of these models, leading to… CONTINUE READING
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