Resolving the conflict on conduct parameter estimation in homogeneous goods markets between Bresnahan (1982) and Perloff and Shen (2012)

We revisit conduct parameter estimation in homogeneous goods markets to resolve the conflict between Bresnahan (1982) and Perloff Shen (2012) regarding identification of parameters. point out that Shen’s proof is incorrect its simulation setting invalid. Our shows becomes accurate when demand shifters are properly added supply sample sizes increased, supporting (1982).