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Scanner Data: New Opportunities For Demand And Competitive Strategy Analysis

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  • Cotterill, Ronald W.

Abstract

This paper reviews prior research by agricultural economists on the demand for food products using scanner data. Thereafter, a differentiated product's oligopoly model with Bertrand price competition is developed and used to specify brand level demand and oligopoly price reaction equations. The model has sufficient detail to estimate brand level price elasticities and price response elasticities which in turn can be used to estimate three indices of market power. The first index estimated is the familiar Rothschild Index. The paper develops estimates two new indexes, the observed index and the Chamberlin quotient for tacit collusion. It concludes with comments on how the proposed method for the measurement of market power in a differentiated oligopoly can be improved.

Suggested Citation

  • Cotterill, Ronald W., 1994. "Scanner Data: New Opportunities For Demand And Competitive Strategy Analysis," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 23(2), pages 1-15, October.
    • Handle: RePEc:ags:arerjl:31441
    DOI: 10.22004/ag.econ.31441
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    References listed on IDEAS

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    1. Chalfant, James A, 1987. "A Globally Flexible, Almost Ideal Demand System," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(2), pages 233-242, April.
    2. Oral Capps, 1989. "Utilizing Scanner Data to Estimate Retail Demand Functions for Meat Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 750-760.
    3. McLaughlin, Edward W. & Lesser, William H., 1986. "Experimental Price Variability and Consumer Response: Tracking Potato Sales with Scanners," Staff Papers 186131, Cornell University, Department of Applied Economics and Management.
    4. Ronald W. Cotterill & Lawrence E. Haller, 1994. "Market Strategies in Branded Dairy Product Markets," Food Marketing Policy Center Research Reports 023, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
    5. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, November.
    6. Hausman, Jerry A & Taylor, William E, 1981. "Panel Data and Unobservable Individual Effects," Econometrica, Econometric Society, vol. 49(6), pages 1377-1398, November.
    7. Raymond Deneckere & Carl Davidson, 1985. "Incentives to Form Coalitions with Bertrand Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 473-486, Winter.
    8. Langan, Glenn E. & Cotterill, Ronald W., 1994. "Estimating Brand Level Demand Elasticities and Measuring Market Power for Regular Carbonated Soft Drinks," Working Papers 116168, Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance.
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