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on Discrete Choice Models |
| By: | Marcia M. A. Schafgans; Joachim Stibora |
| Abstract: | We develop a general equilibrium model of multiproduct fi…rms with quality differentiated goods. Households are characterized by an heterogeneous taste for the differentiated good and their income level. The use of non-homothetic preferences and vertical product differentiation (product quality) enables us to analyze how distributional changes in income affect the number of vertically differentiated …firms, their product range and prices in the presence of strategic interaction across …rms. The implications of lowering the barriers to trade within this setting are considered as well. |
| Keywords: | multiproduct firms; endogenous product scope; product quality; income distribution; discrete choice; trade liberalization; Oligopoly |
| JEL: | J1 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:58168&r=dcm |
| By: | Schmitt, Noemi; Westerhoff, Frank |
| Abstract: | Within the seminal cobweb model of Brock and Hommes, firms adapt their price expectations by a profit-based switching behavior between free näive expectations and costly rational expectations. Brock and Hommes demonstrate that fixed-point dynamics may turn into increasingly complex dynamics as the firms' intensity of choice increases. We show that policy-makers are able to manage rational routes to randomness by adjusting profit taxes. As suggested by our analytical and numerical analysis, policy-makers should increase (decrease) profit taxes if destabilizing expectations generate higher (lower) profits than stabilizing expectations to alter the composition of applied expectation rules and thereby to promote market stability. Our results are not restricted to cobweb models: a huge body of literature demonstrates that rational routes to randomness may emerge in many different markets. |
| Keywords: | cobweb models,discrete choice approach,intensity of choice,profit taxes,stability analysis,policy implications |
| JEL: | D84 E30 Q11 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bamber:96&r=dcm |
| By: | Nina Neubecker (DIW, Berlin, Germany); Marcel Smolka (Department of Economics and Business, Aarhus University, Denmark); Anne Steinbacher |
| Abstract: | This paper provides new evidence on migrant networks as determinants of the scale and skill structure of migration, using aggregate data from a recent migration boom to Spain. We develop a three-level nested multinomial logit migration model. Our model accommodates varying degrees of similarity of destinations located in the same region (or the same country), allowing for a rich structure of substitutability across alternative destinations. We find strong positive network effects on the scale of migration and a strong negative effect on the ratio of high-skilled to low-skilled migrants. Simplifying restrictions on substitutability across destinations are rejected by the data. |
| Keywords: | international migration, migrant networks, nested multinomial, logit model, skill structure of migration, Spain |
| JEL: | F22 J61 |
| Date: | 2015–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:aah:aarhec:2015-03&r=dcm |