Product Differentiation and Mergers in the Carbonated Soft Drink Industry
نویسندگان
چکیده
I simulate the competitive impact of several soft drink mergers from the 1980s on equilibrium prices and quantities. An unusual feature of soft drink demand is that, at the individual purchase level, households regularly select a variety of soft drink products. Specifically, on a given trip households may select multiple soft drink products and multiple units of each. A concern is that using a standard discrete choice model that assumes single unit purchases may understate the price elasticity of demand. To model the sophisticated choice behavior generating this multiple discreteness, I use a household-level scanner data set. Market demand is then computed by aggregating the household estimates. Combining the aggregate demand estimates with a model of static oligopoly, I then run the merger simulations. Despite moderate price increases, I find substantial welfare losses from the proposed merger between Coca-Cola and Dr. Pepper. I also find large price increases and corresponding welfare losses from the proposed merger between Pepsi and 7 UP and, more notably, between Coca-Cola and Pepsi.
منابع مشابه
Assessment environmental factors and energy consumption of Carbonated Soft Drink Production: Case Study- Gorgan ZamZam Company, Iran
Evaluation of energy and environmental pollutants A production process is important in terms of providing solutions to reduce energy consumption and emissions. The importance of environmental protection and the potential impacts associated with manufactured and consumed products have increased interest in identifying these effects. In addition, one of the most important challenges in the indust...
متن کاملPrice Discrimination with Asymmetric Firms: The Case of The U.S. Carbonated Soft Drinks Market
This paper investigates the relationship between price discrimination and vertical product differentiation, using National Brands and Private Labels in the Carbonated Soft Drink market as a case study. We decompose prices difference into quantity discount and cost difference across packagings and recover marginal cost by a structural demand model of consumer preference and firm behavior. Our re...
متن کاملMultiple Discreteness and Product Differentiation: Demand for Carbonated Soft Drinks
F several of the largest supermarket product categories, such as carbonated soft drinks, canned soups, ready-to-eat cereals, and cookies, consumers regularly purchase assortments of products. Within the category, consumers often purchase multiple products and multiple units of each alternative selected on a given trip. This multiple discreteness violates the single-unit purchase assumption of m...
متن کاملAn In - Vitro study on the effect of Iranian soft drinks on enamel microhardness of primary teeth
An In - Vitro study on the effect of Iranian soft drinks on enamel microhardness of primary teeth Dr. B. Ajami* - Dr. M. Ebrahimi** - Dr. S. Karbasi*** *- Associate Professor of Pedodontics Dept. – Faculty of Dentistry – Mashhad University of Medical Sciences. **- Assistant Professor of Pedodontics Dept. – Faculty of Dentistry – Mashhad University of Medical Sciences. ***- Dentist. Background a...
متن کامل