Testing for complementarities among countable strategies

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Miravete, Eugenio J. (2014) Testing for complementarities among countable strategies. Empirical Economics, 46 (4). pp. 1521-1544. ISSN 0377-7332

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Abstract

I study whether the pricing strategies of competing duopolists in the early U.S. cellular telephone industry can be considered strategic complements or substitutes. In order to do so, I present a multivariate count data regression model that is suitable to test for the existence of strategic complementarities when firms make use of countable strategies. The estimator, which accommodates the underdispersion that characterizes the data, is shown to have better small sample properties than common estimators based on the Gaussian copula. It also allows for correlations of any sign among counts independently of the dispersion parameters. Results show that in addition to screening consumers, competing firms imitated each other in the number of tariff options offered to their customers.

Item Type: Article
Uncontrolled Keywords: strategic complementarity,number of tariff options ,multivariate count data models,sarmanov distributions
Faculty \ School: Faculty of Social Sciences > School of Economics
UEA Research Groups: Faculty of Social Sciences > Research Groups > Industrial Economics
Faculty of Social Sciences > Research Centres > Centre for Competition Policy
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Depositing User: Pure Connector
Date Deposited: 13 Jan 2017 00:06
Last Modified: 12 May 2023 00:28
URI: https://ueaeprints.uea.ac.uk/id/eprint/62037
DOI: 10.1007/s00181-013-0729-y

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