To Bundle or Not To Bundle: Firms’ Choices Under Pure Bundling

We examine the economic implications of pure bundling under the settings of monopoly and duopoly. We show that under monopoly and pure bundling of goods with independent demands, the bundled price is strictly less than the sum of the unbundled prices. In the setting...

Generic Competition in the U.S. Pharmaceutical Industry

We develop a simultaneous equations estimation framework to understand the interactions among generic entry, prices, and market shares. We base our estimates on a panel data sample of 40 brand-name drugs that first experienced generic competition during the period...

Predicting The Price Effect of Mergers with Polynomial Logit Demand

We propose a polynomial logit model to quantify the price effects of mergers in a static Nash setting. The proposed model is parsimonious in parameters and is shown to have excellent predictive power, rivaling the in-sample and out-of-sample predictive accuracy of the...

Globally Flexible Asymptotically Ideal Models

We have recently been involved in estimating a number of Asymptotically Ideal Model (AIM) forms on multiple data sets, and the experience has led us to consider the connection between theory and practice in some detail. The AIM has a number of claimed advantages that...