Pass-through and tax incidence in differentiated product markets

IF 1.7 3区 经济学 Q2 ECONOMICS
Eugenio J. Miravete , Katja Seim , Jeff Thurk
{"title":"Pass-through and tax incidence in differentiated product markets","authors":"Eugenio J. Miravete ,&nbsp;Katja Seim ,&nbsp;Jeff Thurk","doi":"10.1016/j.ijindorg.2023.102985","DOIUrl":null,"url":null,"abstract":"<div><p>The role of demand curvature in determining firm behavior in symmetric oligopolistic product markets is well-understood. We consider the empirically relevant discrete choice differentiated product demand and point to two forces that drive curvature in logit demand: the impact of outside-good spending on the consumer’s indirect utility and the heterogeneity in this response across consumers. We use the canonical example of the ready-to-eat cereal market (Nevo, 2000) to contrast elasticity and curvature estimates across several workhorse models. We illustrate that the log-concave Multinomial Logit and Nested Logit demands yield significantly biased curvature estimates. In contrast, a Mixed Logit specification generates a wider range of curvatures, including curvatures larger than one. These results are of immediate relevance to the robust assessment of tax incidence and the pass-through of cost savings, such as from a horizontal merger, in differentiated product markets.</p></div>","PeriodicalId":48127,"journal":{"name":"International Journal of Industrial Organization","volume":"90 ","pages":"Article 102985"},"PeriodicalIF":1.7000,"publicationDate":"2023-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Industrial Organization","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0167718723000668","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0

Abstract

The role of demand curvature in determining firm behavior in symmetric oligopolistic product markets is well-understood. We consider the empirically relevant discrete choice differentiated product demand and point to two forces that drive curvature in logit demand: the impact of outside-good spending on the consumer’s indirect utility and the heterogeneity in this response across consumers. We use the canonical example of the ready-to-eat cereal market (Nevo, 2000) to contrast elasticity and curvature estimates across several workhorse models. We illustrate that the log-concave Multinomial Logit and Nested Logit demands yield significantly biased curvature estimates. In contrast, a Mixed Logit specification generates a wider range of curvatures, including curvatures larger than one. These results are of immediate relevance to the robust assessment of tax incidence and the pass-through of cost savings, such as from a horizontal merger, in differentiated product markets.

差异化产品市场中的转嫁和税收发生率
在对称的寡头垄断产品市场中,需求曲率在决定企业行为中的作用是很容易理解的。我们考虑了与经验相关的离散选择差异化产品需求,并指出了驱动logit需求曲率的两股力量:外部商品支出对消费者间接效用的影响以及消费者对此反应的异质性。我们使用即食谷物市场的典型例子(Nevo, 2000)来对比几个主力模型的弹性和曲率估计。我们说明了对数凹多项式Logit和嵌套Logit需求会产生明显的偏曲率估计。相反,混合Logit规范生成的曲率范围更广,包括大于1的曲率。这些结果与在差异化产品市场中对税收发生率和成本节约的传递(如横向合并)进行强有力的评估直接相关。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
求助全文
约1分钟内获得全文 求助全文
来源期刊
CiteScore
2.50
自引率
6.70%
发文量
48
审稿时长
77 days
期刊介绍: The IJIO is an international venture that aims at full coverage of theoretical and empirical questions in industrial organization. This includes classic questions of strategic behavior and market structure. The journal also seeks to publish articles dealing with technological change, internal organization of firms, regulation, antitrust and productivity analysis. We recognize the need to allow for diversity of perspectives and research styles in industrial organization and we encourage submissions in theoretical work, empirical work, and case studies. The journal will also occasionally publish symposia on topical issues.
×
引用
GB/T 7714-2015
复制
MLA
复制
APA
复制
导出至
BibTeX EndNote RefMan NoteFirst NoteExpress
×
提示
您的信息不完整,为了账户安全,请先补充。
现在去补充
×
提示
您因"违规操作"
具体请查看互助需知
我知道了
×
提示
确定
请完成安全验证×
copy
已复制链接
快去分享给好友吧!
我知道了
右上角分享
点击右上角分享
0
联系我们:info@booksci.cn Book学术提供免费学术资源搜索服务,方便国内外学者检索中英文文献。致力于提供最便捷和优质的服务体验。 Copyright © 2023 布克学术 All rights reserved.
京ICP备2023020795号-1
ghs 京公网安备 11010802042870号
Book学术文献互助
Book学术文献互助群
群 号:481959085
Book学术官方微信