Mergers, brand competition, and the price of a pint

Joris Pinkse; Margaret E. Slade

doi:10.1016/S0014-2921(02)00328-8

Mergers, brand competition, and the price of a pint

Joris Pinkse, Margaret E. Slade

Economics

Research output: Contribution to journal › Article › peer-review

120 Scopus citations

Abstract

Mergers in the UK brewing industry have reduced the number of national brewers from six to four. The number of brands, in contrast, has remained relatively constant. We analyze the effects of mergers on brand competition and pricing. Brand-level demand equations are estimated from a panel of draft beers. To model brand-substitution possibilities, we estimate the matrix of cross-price elasticities semiparametrically. Our structural model is used to assess the strength of brand competition along various dimensions and to evaluate the mergers. In particular, we compute equilibria of pricing games with different numbers of players.

Original language	English (US)
Pages (from-to)	617-643
Number of pages	27
Journal	European Economic Review
Volume	48
Issue number	3
DOIs	https://doi.org/10.1016/S0014-2921(02)00328-8
State	Published - Jun 2004

All Science Journal Classification (ASJC) codes

Finance
Economics and Econometrics

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10.1016/S0014-2921(02)00328-8

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title = "Mergers, brand competition, and the price of a pint",

abstract = "Mergers in the UK brewing industry have reduced the number of national brewers from six to four. The number of brands, in contrast, has remained relatively constant. We analyze the effects of mergers on brand competition and pricing. Brand-level demand equations are estimated from a panel of draft beers. To model brand-substitution possibilities, we estimate the matrix of cross-price elasticities semiparametrically. Our structural model is used to assess the strength of brand competition along various dimensions and to evaluate the mergers. In particular, we compute equilibria of pricing games with different numbers of players.",

author = "Joris Pinkse and Slade, {Margaret E.}",

note = "Funding Information: This research was supported by grants from the Social Sciences and Humanities Research Council of Canada. We would like to thank the following people for thoughtful comments: Aviv Nevo, Otto Toivanen, two anonymous referees, and seminar participants at the ES meetings in Boston, the Canadian Bureau of Competition Policy, the conferences on Industrial Organization and the Food Processing Industry in Toulouse and Antitrust Issues in International Markets in Berlin, and the Universities of Calgary, Southern California, Carnegie Mellon, Vanderbilt, Victoria, Carlos III, Oxford, Warwick, and Paris I. ",

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Mergers, brand competition, and the price of a pint

Abstract

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