Explaining pricing conduct in a product-differentiated oligopolistic market: An empirical application of a price conjectural variations model
A generalized Bertrand-type model is applied to gain insights on Japanese firms' pricing conduct regarding milk beverages made from fresh milk and reconstituted milk. The empirical results, based on weekly scanner data, indicate the original Bertrand model is inappropriate for our empirical analysis. The estimated model resulted in substantially more elastic own-price elasticities than previous estimates in Japan based on aggregate market data, supporting the Japanese retailers' contention that fluid milk is a more price-elastic product than what previous studies had found. Incorporating estimated price conjectures into the model resulted in considerable discrepancies between partial and perceived own-price elasticities. The result shows that a firm's price conjecture can be an important factor in determining the firm's perceived own-price elasticity. The estimated conjectural variations were tested to determine whether they represent consistent pricing behavior, and the results indicated that consistent pricing behavior could not be statistically supported. [Econ-Lit citations: Q110, Q130] © 2002 Wiley Periodicals, Inc.
Volume (Year): 18 (2002)
Issue (Month): 4 ()
|Contact details of provider:|| Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Schroeter, John R, 1988.
"Estimating the Degree of Market Power in the Beef Packing Industry,"
The Review of Economics and Statistics,
MIT Press, vol. 70(1), pages 158-62, February.
- Schroeter, John R., 1988. "Estimating the Degree of Market Power in the Beef Packing Industry," Staff General Research Papers 11114, Iowa State University, Department of Economics.
- Iwata, Gyoichi, 1974. "Measurement of Conjectural Variations in Oligopoly," Econometrica, Econometric Society, vol. 42(5), pages 947-66, September.
- Cotterill, Ronald W. & Putsis, William P., Jr. & Dhar, Ravi, 2000. "Market Share and Price Setting Behavior For Private Labels and National Brands," Research Reports 25209, University of Connecticut, Food Marketing Policy Center.
- Sanjib Bhuyan & Rigoberto A. Lopez, 1997. "Oligopoly Power in the Food and Tobacco Industries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 1035-1043.
- repec:jaa:jagape:v:31:y:1999:i:1:p:1-13 is not listed on IDEAS
- Appelbaum, Elie, 1982. "The estimation of the degree of oligopoly power," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 287-299, August.
- Vickner, Steven S. & Davies, Stephen P., 1999. "Estimating Market Power And Pricing Conduct In A Product-Differentiated Oligopoly: The Case Of The Domestic Spaghetti Sauce Industry," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 31(01), April.
- Ronald Cotterill & William Putsis, 2000. "Market Share and Price Setting Behavior for Private Labels and National Brands," Review of Industrial Organization, Springer, vol. 17(1), pages 17-39, August.
When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:18:y:2002:i:4:p:427-436. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.