scholarly journals Local Government Cooperation at Work: A Control Function Approach

2014 ◽  
Author(s):  
Zineb Abid ◽  
Edoardo Di Porto ◽  
Angela Parenti ◽  
Sonia Paty
Keyword(s):  
Local Government ◽  
Control Function ◽  
Function Approach ◽  
Control Function Approach

scholarly journals Local government cooperation at work: a control function approach

2016 ◽  
pp. lbw008 ◽  
Author(s):  
Edoardo Di Porto ◽  
Angela Parenti ◽  
Sonia Paty ◽  
Zineb Abidi
Keyword(s):  
Local Government ◽  
Control Function ◽  
Function Approach ◽  
Control Function Approach

Demand Estimation Using Managerial Responses to Automated Price Recommendations

2022 ◽  
Author(s):  
Daniel Garcia ◽  
Juha Tolvanen ◽  
Alexander K. Wagner
Keyword(s):  
Control Function ◽  
Price Change ◽  
Decision Makers ◽  
Function Approach ◽  
Difference In Differences ◽  
Price Variation ◽  
Data Set ◽  
Demand Elasticities ◽  
Price Adjustments ◽  
Control Function Approach

We provide a new framework to identify demand elasticities in markets where managers rely on algorithmic recommendations for price setting and apply it to a data set containing bookings for a sample of midsized hotels in Europe. Using nonbinding algorithmic price recommendations and observed delay in price adjustments by decision makers, we demonstrate that a control-function approach, combined with state-of-the-art model-selection techniques, can be used to isolate exogenous price variation and identify demand elasticities across hotel room types and over time. We confirm these elasticity estimates with a difference-in-differences approach that leverages the same delays in price adjustments by decision makers. However, the difference-in-differences estimates are more noisy and only yield consistent estimates if data are pooled across hotels. We then apply our control-function approach to two classic questions in the dynamic pricing literature: the evolution of price elasticity of demand over and the effects of a transitory price change on future demand due to the presence of strategic buyers. Finally, we discuss how our empirical framework can be applied directly to other decision-making situations in which recommendation systems are used. This paper was accepted by Omar Besbes, revenue management and market analytics.

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