Assessing the Competitive Interaction between Private Labels and National Brands
AbstractIn this article, we employ the Linear Approximate Almost Ideal Demand System (LA/AIDS), and specify price reaction equations derived under the LA/AIDS specification. We perform intracategory analyses using data on six individual categories, as well as a pooled analysis on a sample of 125 categories and 59 geographic markets. We find that consumer response to price and promotion decisions (demand) and firm pricing behavior (supply) jointly determine observed market prices and market shares. Further, estimates of residual demand elasticities suggest that examination of partial demand elasticities alone may provide an incomplete picture of the ability of brands to raise price.
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Bibliographic InfoPaper provided by Yale School of Management in its series Yale School of Management Working Papers with number ysm131.
Date of creation: 01 Dec 1999
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Find related papers by JEL classification:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
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- Steven S. Vickner & Stephen P. Davies, 2002. "Estimating strategic price response using cointegration analysis: The case of the domestic black and herbal tea industries," Agribusiness, John Wiley & Sons, Ltd., vol. 18(2), pages 131-144.
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