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Estimating Coke and Pepsi's Price and Advertising Strategies

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Author Info
Amos Golan (American University)
Larry Karp (University of California, Berkeley, and Giannini Foundation)
Jeffrey Perloff (University of California, Berkeley, and Giannini Foundation)

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Abstract

A semi-parametric, information-based estimator is used to estimate strategies in prices and advertising for Coca-Cola and Pepsi-Cola. Separate strategies for each firm are estimated with and without restrictions from game theory. These information/entropy estimators are consistent, are efficient, and do not require distributional assumptions. These estimates are used to test theories about the strategies of firms and to see how changes in incomes or factor prices affect these strategies.

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File URL: http://repositories.cdlib.org/cgi/viewpdf.cgi?article=1022&context=iber/cpc&preview_mode=
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Publisher Info
Paper provided by Competition Policy Center, Institute for Business and Economic Research, UC Berkeley in its series Competition Policy Center, Working Paper Series with number CPC99-004.

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Date of creation: 01 Jul 1998
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Handle: RePEc:cdl:compol:cpc99-004

Note: oai:cdlib1:iber/cpc-1022
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Related research
Keywords: strategies; noncooperative games; oligopoly; generalized maximum entropy; beverages;

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  1. Wang, Shinn-Shyr & Stiegert, Kyle W. & Dhar, Tirtha P., 2006. "Strategic Pricing Behavior under Asset Value Maximization," Staff Paper Series 495, University of Wisconsin, Agricultural and Applied Economics. [Downloadable!]
  2. Wang, Shinn-Shyr & Stiegert, Kyle W. & Dhar, Tirtha, 2005. "Strategic Pricing Behavior under Asset Value Maximization," 2005 Annual meeting, July 24-27, Providence, RI 19198, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  3. Dhar, Tirtha P. & Chavas, Jean-Paul & Cotterill, Ronald W. & Gould, Brian W., 2002. "An Econometric Analysis of Brand Level Strategic Pricing Between Coca Cola and Pepsi Inc," Research Reports 25231, University of Connecticut, Food Marketing Policy Center. [Downloadable!]
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