Code

Matlab Code Moraga-González and Wildenbeest (EER 2008)

Below five Matlab m files that can be used to estimate the consumer search model as described in Maximum likelihood estimation of search costs (with José Luis Moraga-González), European Economic Review 52, 820-848, 2008.

The code is meant for academic research only. Users of this code (or a modified version of it) should reference the above paper. The code is provided without additional support. The code is tested using Matlab 7.8 (including optimization toolbox) on both Mac OS X and Windows XP.

The main file is:

• maxlik.m - Reads the data and calls the other functions.

Accompanying functions are:

• loglik.m - Computes the log-likelihood function;

• f.m - Computes F(p) that solves the equilibrium condition;

• condc.m - Computes the integrand used to calculate the critical search cost values;

• conddc.m - Computes the derivative of the search cost values with respect to the parameters.

Price data used for the estimation:

• pricedata.txt - Prices of Kingston KTT3614 memory chip.