Evaluating Coordinated E¤ects: An application to the US beer industry
AbstractThe paper brings Friedman?s (1971) collusive game to data and investigates whether the merger between the ?fth and fourth largest brewer (G. Heileman and Stroh) of the US beer industry in the mid 1990?s had a signi?cant impact on the incentives to collude in the industry. It does so by ?rstly estimating a random coe¢ cient Logit demand system for the US beer market. In a second step the demand estimates are used to conduct a merger simulation (Davis, 2006) quantifying coordinated e¤ects of the merger. The results show that the change in the likelihood of collusion for the non merging parties was negligible, but signi?cantly increased for the merged party.
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Bibliographic InfoPaper provided by University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy in its series Food Marketing Policy Center Research Reports with number 114.
Length: 77 pages
Date of creation: Jul 2009
Date of revision:
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