Journal of Applied Econometrics · 2015 · 10 citations · 30 references
Social SciencesBusiness EconomicsEconomicsEconometricsMicroeconomicsPublic EconomicsNetwork EffectsNonparametric EconometricsNonparametric StatisticsSemiparametric EconometricsSemiparametric ModelingTwo-sided MarketsInstrumental Variables RegressionLocal Network EffectsNonparametric Instrumental VariablesNonparametric RegressionSemiparametric InferenceSemiparametric Instrumental VariablesSemiparametric RegressionTwo-sided Market Models
Summary This paper considers an empirical semiparametric model for two‐sided markets. Contrary to existing empirical literature on two‐sided markets, we specify network effects and probability distribution functions of net benefits of the two sides nonparametrically. We then estimate the model by nonparametric instrumental variables regression for local daily newspapers from the USA. We show that semiparametric specification is supported by the data and the network effects are neither linear nor monotonic. With a numerical illustration we demonstrate that the mark‐up of the newspaper on each side changes drastically with the nonlinearly specified network effects from the case with linear network effects. Copyright © 2015 John Wiley & Sons, Ltd.
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Instrumental Variable Estimation of Nonparametric Models
Whitney K. Newey, James L. Powell · Econometrica · 2003 · 897 citations