Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/121385
Authors: 
Wakamori, Naoki
Year of Publication: 
2015
Series/Report no.: 
SFB/TR 15 Discussion Paper 499
Abstract: 
Consumers often purchase more than one differentiated product, assembling a portfolio, which might potentially affect substitution patterns of demand and, as a consequence, oligopolistic firms' pricing strategies. To study such consumers' portfolio considerations, this paper develops and estimates a structural model that allows for flexible complementarities/substitutabilities, using Japanese household-level data on automobile purchases. My estimates suggest that complementarities arise when households purchase a combination of one small automobile and one minivan as their portfolio. Simulation results suggest that, due to such portfolio considerations, a policy proposal of repealing the current tax subsidies for small eco-friendly automobiles would not necessarily sharply decrease the demand.
Subjects: 
Multiple Discrete Choices
Complementarities
Environmental Policy
JEL: 
D43
L13
L62
Q58
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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