View the step-by-step solution to:

Read the papers by Rob Porter (1983, Bell Journal of Economics) and Frank Mariuzzo and Patrick Walsh (2006, Working Paper). Download the railroad...

Read the papers by Rob Porter (1983, Bell Journal of Economics) and Frank Mariuzzo and Patrick Walsh (2006, Working Paper). Download the railroad cartel data from Porter’s paper, available at http://www.wcas.northwestern.edu/csio/data.html.
Re-estimate the model by Porter: i) Specify the demand and supply model. Follow the first approach in the paper, where conduct shifts from cartel to collusion are known based on the price war dummy variable. ii) Discuss the identification of the conduct parameters. iii) Specify your instruments and variables to be included. Present summary statistics of your variables. iv) Estimate the model sequentially, i.e. first demand and then supply. v) In addition, also have a look at a linear specification of demand and supply. Is the conduct parameter identified? vi) In the light of your results, discuss the paper by Mariuzzo and Walsh.

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question