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Split Apart: Differentiation, Diversion, and Coordination in the Market for Superpremium Ice Cream

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  • Christopher Sullivan

Abstract

I explore recent behavior in the market for superpremium ice cream. I first document that the flavors offered in supermarkets by Ben & Jerry's and Haagen-Dazs became increasingly differentiated from 2006–2013. Using an estimated model of demand, I show that this differentiation increased profits for both firms. Also, unilateral deviation from the set of products offered in 2013 would have increased variable profits for the deviating firm. These facts, when coupled with anecdotal evidence, suggest that these firms tacitly coordinated their choice of flavors. A companion piece, Sullivan (2019), formalizes this result and quantifies the implications for outcomes and welfare.

Suggested Citation

  • Christopher Sullivan, 2020. "Split Apart: Differentiation, Diversion, and Coordination in the Market for Superpremium Ice Cream," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 573-578, May.
    • Handle: RePEc:aea:apandp:v:110:y:2020:p:573-78
    DOI: 10.1257/pandp.20201011
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    Cited by:

    1. Qin, Fei & Ma, Meilin, 2022. "Unit Pricing Regulation and Non-Price Responses of Retailers: Evidence from the U.S. Yogurt Market," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322243, Agricultural and Applied Economics Association.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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