Publication

2006 - Division of Research, Harvard Business School, Boston, Massachusetts

Language

English

Word Count

6,000 words, Guess

Page Count

24 pages

Identifiers

Description

This paper shows how surveys can be used to generate a measure of the amount of information and/or heterogeneity of preferences within a market. This measure can be employed as a regressor in empirical work where variance in the dependent variable (e.g., auction prices, retail price dispersion, or investment choices in stocks, R&D, or education) might be explained by uncertainty about the value of the item being sold or the returns to investment choice and/or heterogeneous preferences in the market. The effects of incomplete information and heterogeneous preferences are usually relegated to the error term, which a) confounds these effects with other drivers of the error term and b) could lead to heteroskedasticity at best or omitted variable bias at worst.

Subjects

Series Statement

  • Working paper / Division of Research, Harvard Business School -- 06-009

Reader Reviews

No reviews yet for this book.

Be the first to share your thoughts!