Extending fixed-point methods for equilibrium computation in markets with differentiated products

Abstract

This paper extends fixed-point approaches for computing equilibrium prices under mixed-logit demand across various conduct models. Building on Morrow and Skerlos (2011), we reformulate iteration functions to improve convergence beyond Bertrand–Nash models of competition, including Cournot and Linear Pricing-Double Marginalization. Monte Carlo simulations and an application to the U.S. automobile industry show our method’s superior reliability in counterfactual price computations.