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TESTING FOR COMPLEMENTARITY AMONG COUNTABLE STRATEGIES
(Click above to download a pdf copy of the paper)
- Abstract: I present a multivariate count data regression model that is suitable to test for the existence of strategic complementarities when firms make use of countable strategies. The estimator accommodates both over and underdispersion. It also allows for correlations of any sign among counts independently of the dispersion parameters. I apply the model to address whether the pricing strategies of competing duopolists in the early U.S. cellular telephone industry can be considered strategic complements or substitutes.
- Publication: Previously circulated as CEPR DP No. 7463.
- JEL: C16, C35, L11.
- First version: June 2008.
- Current version: August 2011.
- Funding: None.
- Seminars: None.
- Conferences: Texas Camp Econometrics XIV (2009).
- Presentation: PDF.
- Media Citations: None.
- Data.
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