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I am trying to estimate an equation of the form:
Where peak_css is a time series of prices, reserve_margin is a time series of available spare capacity in the system. My objective is to get an equation where the prices respond to available capacity up to a certain point, and then beyond that don't react any more.

Whenever I try to estimate this equation I get the error "Illegal lax or index specification for coefficient C". What does this mean and how can I estimate my question?
I also get the same error when I try to estimate the simpler equation:
But I don't get an error when I estimate I am using Eviews version 7.

Regards,
Tracy

When writing an explicit expression for an equation, you cannot use C as a constant, and you must list the coefficients you want to use. Thus, you should change your equation to be:

Oh how simple - and it now works - fantastic!