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Does Private Label Ownership And Pricing Structure Matter?

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  • Pittman, Grant
  • Love, H. Alan

Abstract

This article provides an analysis of the two-stage game between manufacturers and retailers. Response functions showing how prices are set are derived for the case of a manufacturer producing one and multiple goods and for a retailer selling multiple goods. The functions are expressed in terms of elasticities, budget shares, and variable production costs. An application using ready-to-eat cereals is conducted to investigate the pricing structure and ownership of private label cereals.

Suggested Citation

  • Pittman, Grant & Love, H. Alan, 2004. "Does Private Label Ownership And Pricing Structure Matter?," 2004 Annual meeting, August 1-4, Denver, CO 20193, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea04:20193
    DOI: 10.22004/ag.econ.20193
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    File URL: https://ageconsearch.umn.edu/record/20193/files/sp04pi01.pdf
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    References listed on IDEAS

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    1. Cotterill, Ronald W & Putsis, William P, Jr & Dhar, Ravi, 2000. "Assessing the Competitive Interaction between Private Labels and National Brands," The Journal of Business, University of Chicago Press, vol. 73(1), pages 109-137, January.
    2. Iwata, Gyoichi, 1974. "Measurement of Conjectural Variations in Oligopoly," Econometrica, Econometric Society, vol. 42(5), pages 947-966, September.
    3. Ronald Cotterill & William Putsis, 2000. "Market Share and Price Setting Behavior for Private Labels and National Brands," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 17(1), pages 17-39, August.
    4. Capps Jr., Oral & Church, Jeffrey & Alan Love, H., 2003. "Specification issues and confidence intervals in unilateral price effects analysis," Journal of Econometrics, Elsevier, vol. 113(1), pages 3-31, March.
    5. Mills, David E, 1995. "Why Retailers Sell Private Labels," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(3), pages 509-528, Fall.
    6. Mountain, Dean C, 1988. "The Rotterdam Model: An Approximation in Variable Space," Econometrica, Econometric Society, vol. 56(2), pages 477-484, March.
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