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Proliferation of Brewers’ Brands and Price Uniformity in Canadian Beer Markets

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  • Andrew Eckert

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  • Douglas West

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Abstract

In this paper, we study retail pricing in Canadian beer markets, where access to the liquor distribution system and the retail price list is restricted by government ownership and control of the system. We consider alternative explanations for price uniformity in the differentiated beer products market. While an analysis of retail beer price data from six Canadian provinces for a 10-year period shows that no single explanation of price uniformity strongly dominates the others, some of the results are consistent with menu cost and demand uncertainty theories of price uniformity. Copyright Springer Science+Business Media, LLC. 2013

Suggested Citation

  • Andrew Eckert & Douglas West, 2013. "Proliferation of Brewers’ Brands and Price Uniformity in Canadian Beer Markets," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 42(1), pages 63-83, February.
  • Handle: RePEc:kap:revind:v:42:y:2013:i:1:p:63-83
    DOI: 10.1007/s11151-012-9357-5
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    References listed on IDEAS

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    1. Ben Shiller & Joel Waldfogel, 2009. "Music for a Song: An Empirical Look at Uniform Song Pricing and its Alternatives," NBER Working Papers 15390, National Bureau of Economic Research, Inc.
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    4. Milgrom, Paul & Roberts, John, 1986. "Price and Advertising Signals of Product Quality," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 796-821, August.
    5. Michaela Draganska & Dipak C. Jain, 2006. "Consumer Preferences and Product-Line Pricing Strategies: An Empirical Analysis," Marketing Science, INFORMS, vol. 25(2), pages 164-174, 03-04.
    6. Victor Tremblay, 2005. "Introduction to Series on U.S. Brewing Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 26(3), pages 243-243, December.
    7. Nelson, Phillip, 1970. "Information and Consumer Behavior," Journal of Political Economy, University of Chicago Press, vol. 78(2), pages 311-329, March-Apr.
    8. Michael Keeley & Kenneth Elzinga, 2003. "Uniform Gasoline Price Regulation: Consequences for Consumer Welfare," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 10(2), pages 157-168.
    9. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-754, July/Aug..
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    Cited by:

    1. Courty, Pascal & Nasiry, Javad, 2015. "Loss Aversion and the Uniform Pricing Puzzle for Vertically Differentiated Products," CEPR Discussion Papers 10523, C.E.P.R. Discussion Papers.
    2. repec:spr:joecth:v:66:y:2018:i:1:d:10.1007_s00199-017-1055-y is not listed on IDEAS

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