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Empirical Models Of Consumer Behavior

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Executive Summary

Models of consumer behavior play a key role in modern empirical Industrial Organization. In this paper, the author surveys some of the models used in this literature. In particular, the author discusses two commonly used demand systems: multi-stage budgeting approaches and discrete choice models. The author motivates their use and highlights some key modeling assumptions. The author next briefly discusses key issues of estimation, and concludes by summarizing some extensions. The empirical analysis of consumer behavior has a long and rich history in economics and econometrics.

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