Estimating Market Power And Pricing Conduct For Private-Label And National Brands In A Product-Differentiated Oligopoly: The Case Of A Frozen Vegetable Market
This paper develops two brand-level demand models, where prices are treated as endogenous, to estimate unilateral market power in a representative product-differentiated oligopolistic food market. The results are estimated using point-of-purchase scanner data and are used to quantify the impact of a private-label brand on the economic performance of national brands. Specifically, our study calculates demand parameter estimates and returns to retailer vertical coordination for the frozen vegetable marketÂ—the third largest private-label food and beverage category in the United States, after ice cream and carbonated beverages. Consistent with broader industry trends, empirical evidence suggests that the private-label brand maintained a slight competitive advantage over Birds Eye and Green Giant.
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