On the Identification of the Costs of Simultaneous Search

16 Pages Posted: 21 Jul 2010

See all articles by José L. Moraga-González

José L. Moraga-González

VU University Amsterdam; University of Groningen

Matthijs R. Wildenbeest

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy

Zsolt Sandor

University of Groningen

Date Written: July 1, 2010

Abstract

This paper studies the identification of the costs of simultaneous search in a class of (portfolio) problems studied by Chade and Smith (2006). We show that aggregate data from a single market, or disaggregate data from a single market segment, do not provide sufficient information to identify the costs of simultaneous search in any reasonable interval. We then show that by pooling aggregate data from multiple markets, or disaggregate data from multiple market segments, the econometrician can identify the costs of simultaneous search in a non-empty interval. Within the context of specific examples, we illustrate that identification of the search cost distribution in its full support may easily be obtained.

Keywords: search costs, portfolio choice, non-parametric identification

JEL Classification: C14, D83, J64

Suggested Citation

Moraga-Gonzalez, Jose Luis and Wildenbeest, Matthijs R. and Sandor, Zsolt, On the Identification of the Costs of Simultaneous Search (July 1, 2010). IESE Business School Working Paper No. 867, Available at SSRN: https://ssrn.com/abstract=1645208 or http://dx.doi.org/10.2139/ssrn.1645208

Jose Luis Moraga-Gonzalez (Contact Author)

VU University Amsterdam ( email )

De Boelelaan 1105
1081 HV Amsterdam
Netherlands

HOME PAGE: http://www.tinbergen.nl/~moraga/

University of Groningen

P.O. Box 800
9700 AV Groningen, Groningen 9700 AV
Netherlands

Matthijs R. Wildenbeest

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

Bloomington, IN 47405
United States
812-856-5067 (Phone)
812-855-3354 (Fax)

HOME PAGE: http://www.kelley.iu.edu/mwildenb

Zsolt Sandor

University of Groningen ( email )

P.O. Box 800
9700 AH Groningen, Groningen 9700 AV
Netherlands

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
39
Abstract Views
579
PlumX Metrics