Comments (3)
IshaanW
commented on August 18, 2024
1
Never mind, I figured out the fundamental flaw in my understanding of the paper!
from comp-econ-sp19.
jmbejara
commented on August 18, 2024
Hi! Something is definitely going wrong. log probabilities should be negative, by definition. (log of a number between zero and one (non-inclusive), should be a negative real number.
from comp-econ-sp19.
IshaanW
commented on August 18, 2024
These are the values I'm getting for profit_bar for each N.
I'm a little confused by what they mean - is the value calculated using equation (8) total profits for the N firms in a market or is it the market entry threshold. My numbers don't seem to follow the assumption below:
Is there an additional step to take like dividing by the number of firms in the market or finding marginal profits (i.e., subtracting pi_(n-1) from pi_n)?
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