Robust firm pricing with panel data

Firms often have imperfect information about demand for their products. We develop an integrated econometric and theoretical framework to model firm demand assessment and subsequent pricing decisions with limited information. We introduce a panel data discrete choice model whose realistic assumption...

Full description

Saved in:
Bibliographic Details
Published inJournal of econometrics Vol. 174; no. 2; pp. 165 - 185
Main Authors Handel, Benjamin R., Misra, Kanishka, Roberts, James W.
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.06.2013
Elsevier Sequoia S.A
Subjects
Consumer behavior
Consumer behaviour
Decision making
Decision making models
Decision models
Econometrics
Economic theory
Firm pricing
Imperfect information
Minimax-regret
Panel data
Partial identification
Pricing
Pricing policies
Simulation
Studies
L15
Partial identification
C44
Firm pricing
Panel data
C14
Minimax-regret
L11
L13
Online AccessGet full text

Cover

More Information
Summary:Firms often have imperfect information about demand for their products. We develop an integrated econometric and theoretical framework to model firm demand assessment and subsequent pricing decisions with limited information. We introduce a panel data discrete choice model whose realistic assumptions about consumer behavior deliver partially identified preferences and thus generate ambiguity in the firm pricing problem. We use the minimax-regret criterion as a decision-making rule for firms facing this ambiguity. We illustrate the framework’s benefits relative to the most common discrete choice analysis approach through simulations and empirical examples with field data.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0304-4076
1872-6895
DOI:10.1016/j.jeconom.2013.02.007