Resum:
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Solving multi-stage oligopoly models by backward induction can easily become a com-
plex task when rms are multi-product and demands are derived from a nested logit frame-
work. This paper shows that under the assumption that within-segment rm shares are
equal across segments, the analytical expression for equilibrium pro ts can be substantially
simpli ed. The size of the error arising when this condition does not hold perfectly is also
computed. Through numerical examples, it is shown that the error is rather small in general.
Therefore, using this assumption allows to gain analytical tractability in a class of models
that has been used to approach relevant policy questions, such as for example rm entry
in an industry or the relation between competition and location. The simplifying approach
proposed in this paper is aimed at helping improving these type of models for reaching more
accurate recommendations. |