em_2var {entrymodels}

Two-Variable Entry Model

Description

Estimate entry model with two variables for the market size.

Usage

em_2var(data, Sm1, Sm2, y, N_max = 5, alpha0 = rep(0.1, N_max),
  gamma0 = rep(1, N_max))

Arguments

data

A data.frame object containing your data

Sm1

A string indicating the main market size variable, present in data

Sm2

A string indicating the second market size variable, present in data

y

A string indicating the outcome variable, present in data

N_max

An integer indicating the maximum number of competitors. Defaults to 5.

alpha0

A vector of type numeric and length N_max indicating the initial condition for alpha. Defaults to a vector of 0.1's.

gamma0

A vector of type numeric and length N_max indicating the initial condition for gamma. Defaults to a vector of 1's.

Value

A tibble with critical market sizes and estimated parameters, as explained in Bresnahan and Reiss (1991)

Author(s)

Guilherme N. Jardim, Department of Economics, Pontifical Catholic University of Rio de Janeiro

References

Bresnahan, T. F., & Reiss, P. C. (1991). Entry and competition in concentrated markets. Journal of political economy, 99(5), 977-1009.

Examples

tb <- data.frame(Sm1 = 1:5, Sm2 = 1:5, y = 1:5)

# estimate default model
em_n5 <- em_2var(tb, "Sm1", "Sm2", "y")

# estimate model with 3 competitors only
em_n3 <- em_2var(tb, "Sm1", "Sm2", "y", N_max = 3)


## Not run: 
# estimate model with different initial conditions
em_difc <- em_2var(tb, "Sm1", "Sm2", "y", alpha0 = rep(0.2, 5), gamma0 = rep(1.1, 5))

# estimate model with example data
tb <- load_example_data()
em <- em_2var(tb, "Populacao", "RendaPerCapita", "n_agencias")

## End(Not run)