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| Author: | Rojas, C. |
| Title: | Price competition in U.S. Brewing |
| Journal: | Journal of Industrial Economics
2008 : MAR, VOL 56:1 p. 1-31 |
| Index terms: | prices competition usa taxation brands |
| Freeterms: | beer collusion |
| Language: | eng |
| Abstract: | This study utilizes a brand-level dataset that captures a unique natural experiment, a 100 % increase in the excise tax, to evaluate different pricing models in the U.S. beer industry. To assess the plausibility of different models, the increase in marginal cost resulting from the tax increase is exploited: observed prices in the post-increase period are compared to the prices that should be observed under various pricing models. Three types of models are analyzed: Bertrand-Nash, leadership, and collusion. Results indicate that extreme cases of collusion could be surely ruled out while several models may explain the observed prices equally well. |
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