Monopoly Power and Endogenous Product Variety: Distortions and Remedies : production of welfare graphs.

Installation

Required programs to produce the graphs are

• a recent distribution of scientific Python for instance Anaconda Python
• the dolo modeling package

Producing the graphs

The code is contained in a IPython notebook. To view and execute it:

• Open a terminal and change the working directory so that it contains the Produce Graphs.ipynb file.
• Launch ipython notebook. This should open a list of notebooks in a web browser. Click on Produce Graphs.ipynb.
• Perform the computations using menu item Cell/Run all or execute each cell one by one with shift+enter.

The notebook will solve three versions of the baseline model (with CES-benassy, translog and exponential specifications) with several values of the parameters. The models are coded using dolo specifications in the model_ces.yaml, model_translog.yaml and model_exponential files. The welfare computations are based on a second order Taylor expansion of the decision-rule.

Output

The resulting graphs are stored in the BGM_welfare_gains.* files.