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A note on stochastic complementarity for the applied researcher
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Iaria, Alessandro and Wang, Ao (2021) A note on stochastic complementarity for the applied researcher. Economics Letters, 199 . 109731. doi:10.1016/j.econlet.2021.109731 ISSN 0165-1765.
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Official URL: https://doi.org/10.1016/j.econlet.2021.109731
Abstract
In their discussion of stochastic complementarity, Manzini et al. (2018) show that the intuitively appealing correlation criterion does not—in general—satisfy the axiom of monotonicity: products classified as complements can turn into substitutes following an increase in their joint purchases. In this note, we show that, however, by restricting attention to mixed logit models along the lines of Gentzkow (2007)’s, one can prevent such violations.
Item Type: | Journal Article | |||||||||
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Subjects: | H Social Sciences > HB Economic Theory | |||||||||
Divisions: | Faculty of Social Sciences > Economics | |||||||||
Library of Congress Subject Headings (LCSH): | Substitution (Economics), Choice (Psychology) -- Economic aspects, Stochastic analysis | |||||||||
Journal or Publication Title: | Economics Letters | |||||||||
Publisher: | Elsevier | |||||||||
ISSN: | 0165-1765 | |||||||||
Official Date: | February 2021 | |||||||||
Dates: |
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Volume: | 199 | |||||||||
Article Number: | 109731 | |||||||||
DOI: | 10.1016/j.econlet.2021.109731 | |||||||||
Status: | Peer Reviewed | |||||||||
Publication Status: | Published | |||||||||
Access rights to Published version: | Restricted or Subscription Access | |||||||||
Date of first compliant deposit: | 30 November 2020 | |||||||||
Date of first compliant Open Access: | 6 July 2022 | |||||||||
RIOXX Funder/Project Grant: |
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