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Identification of Supply Models of Retailer and Manufacturer Oligopoly Pricing

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  • Villas-Boas, Sofia Berto
  • Hellerstein, Rebecca

Abstract

This note outlines conditions under which we can identify a vertical supply model of multiple retailers' and manufacturers' oligopoly-pricing behavior. This is an important question particularly when the researcher believes, contrary to the traditional assumption followed in the empirical literature, that retailers may not be neutral pass-through intermediaries. We show that a data-set of an industry's product prices, quantities, and input prices over time is sufficient to identify the vertical model of retailers' and manufacturers' oligopoly-pricing behavior given nonlinear demand, for homogeneous-products industries, and given multi-product firms, for differentiated-products industries.

Suggested Citation

  • Villas-Boas, Sofia Berto & Hellerstein, Rebecca, 2004. "Identification of Supply Models of Retailer and Manufacturer Oligopoly Pricing," CUDARE Working Papers 25052, University of California, Berkeley, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:ucbecw:25052
    DOI: 10.22004/ag.econ.25052
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