Journal Article Constant Elasticity of Substitution Production Functions Get access Daniel McFadden Daniel McFadden Pittsburgh Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 30, Issue 2, June 1963, Pages 73–83, https://doi.org/10.2307/2295804 Published: 01 June 1963

This paper proposes a simple modification of a conventional method of moments estimator for a discrete response model, replacing response probabilities that require numerical integration with estimators obtained by Monte Carlo simulation.This method of simulated moments (MSM) does not require precise estimates of these probabilities for consistency and asymptotic normality, relying instead on the law of large numbers operating across observations to control simulation error, and hence can use simulations of practical size.The method is useful for models such as high-dimensional multinomial probit (MNP), where computation has restricted applications.

Are consumers sufficiently self-interested and self-reliant so that privatized markets deliver the efficiency and welfare gains they promise? Why are consumers uncomfortable in markets, and in some case sufficiently opposed to market solutions to prevent their implementation? What can be done to prepare consumers so that they function satisfactorily in markets, and understand the advantages of market-based resource allocation? This paper examines the foundations of consumer behavior and attitudes in markets, and proposes a program of scientific research to determine how consumers cope in privatized markets, and the implications for market design of the limits of self-reliance.

When offered a new product whose attributes are unknown, customers can determine whether they like the product by trying it themselves or can wait to observe the experience of other customers who try the product. We specify a rational decision process and investigate the implications of learning from others on the sales of new products and the impact of advertising.

Organizing the program for the annual meetings is by far the most important job of the President-elect.The job is like that of a journal editor, in that the actual content of the program comes from submissions by members, but the importance given to various research and policy areas by program committee members and their reviews of submissions are critical.In addition to organizing the usual program of oral sessions and selecting sessions for inclusion in this volume, committee members assisted me in setting up a series of tutorials on research and policy topics that gave the AEA membership overviews of subjects outside their specialties, and poster sessions that gave more economists opportunities to present their research and meet peers working on similar problems.My program committee was broadly representative of the profession; its members were Alan Auerbach (UC Berkeley, public