
Dear R user,

I have been setting up the models for predicting the volume based on the price information of own product and competitive products. one option is to use instrumental variable to break price into two parts: one part that might be correlated with error term, and the another part that is not. 
But now I met the problem of choosing instumental variables. I have searched many papers. it has been mentioned that cost can be used as one instrumental variable for the price. yes. I can use cost for own price. but how about the competitive price's instrumental variables? I don't know their 
cost information at all except their price information and market share. I will be really appreciated if someone can suggest me the possible choices of instrumental variables for the competitive price?

Thanks in advance.

Kind regards,
Tammy
 		 	   		  
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