NEIONew Empirical Industrial Organization
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Thus, the NEIO approach provides a useful foundation for the empirical work in this study.
Because marginal cost is unobservable, this study follows the NEIO approach by substituting a marginal cost function for Melt in equation (11).
We have shown how the Becker and Murphy framework, the NEIO technique, and other available evidence can be used to estimate the welfare effect of advertising in the U.