Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2010-07-13
Revision-Date: 2011-05-12
Number: 10-066/1
Author-Name: Jose L. Moraga-Gonzalez
Author-Workplace-Name: ICREA, IESE Business School, and University of Groningen
Author-Name: Zsolt Sandor
Author-Workplace-Name: University of Groningen
Author-Name: Matthijs R. Wildenbeest
Author-Workplace-Name: Kelley School of Business, Indiana University
Title: On the Identification of the Costs of Simultaneous Search
Abstract: This paper studies the identification of the costs of simultaneous search in portfolio problems (Chade and Smith, 2006). We show that market shares data from a single market do not provide sufficient information to identify the search cost distribution in any interval, even if utilitydistributions are known to the econometrician. We then show that by pooling data from markets wherethe alternatives that similar decision makers confront vary, the search cost distribution and theutility parameters of the logit demand model can be identified.
Classification-JEL: C14, D83, J64
Keywords: search costs, portfolio choice, non-parametric identification, logit demand
File-Url: https://papers.tinbergen.nl/10066.pdf
File-Format: application/pdf
File-Size: 670218 bytes
Handle: RePEc:tin:wpaper:20100066