Abstract
AbstractThe objective of the paper is to identify the determinants of the market share of each AFJP and the matrix of direct and cross price elasticities, by using a discrete choice model of product differentiation, based on the random utility theory. The results obtained from the estimation of a simple logit model using a panel of quarterly data between December of 1995 and June of 2006 shows the existence of two competitive mechanisms used by firms: prices and a vector of variables explaining horizontal differentiation, such as quantity of branches and salesman. The estimation of the nested-logit model supports the hypothesis of sequential election, where firms are chosen by their price setting strategies, defining two groups of competitors. Finally, the regulatory change that eliminates fixed commissions provides additional importance to prices signals in consumers' utility.
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