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We construct a tractable structural dynamic model of consumption, purchase and stocks by consumers for whom stockpiling is unobserved and for whom preferences are isolastic and affected by independent and identically distributed shocks. Consumers purchase in stores which they meet randomly and which are supposed to maximize short run pro ts. We show that a two-price mixed strategy by stores satis es conditions for an equilibrium in which consumers and stores coordinate their expectations on this stationary solution. We derive a simple and tractable estimation method using log linearized demand equations and equilibrium conditions. We estimate parameters using scanner data registering soda purchases by French consumers during 2005-2007.
Authors
Research Associate Toulouse School of Economics
Thierry is a Research Associate of IFS, a Research Fellow at CEPR, London and a Professor of Economics at the University of Toulouse,
Research Fellow Toulouse School of Economics
Pierre is a Research Fellow at the IFS, a Professor of Economics at the Toulouse School of Economics and a co-editor of the JEEA.
Report details
- Publisher
- Institute for Fiscal Studies
Suggested citation
Dubois, P and Magnac, T. (2015). Consumer demand with unobserved stockpiling and intertemporal price discrimination. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/consumer-demand-unobserved-stockpiling-and-intertemporal-price-discrimination (accessed: 19 April 2024).
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