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Product differentiation and firm size distribution: an application to carbonated soft drinks

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  • Walsh, Patrick Paul
  • Whelan, Ciara

Abstract

Using brand-level retail data, the firm size distribution in carbonated soft drinks is shown to be an outcome of the degree to which firms have placed brands effectively (store coverage) across vertical (flavour, packaging, diet attributes) segments of the market. Regularity of the firm size distribution is not disturbed by the nature of short-run brand competition (turbulence in brand market share) within segments. Remarkably, product differentiation resulting from firms acquiring various portfolios of product attributes and stores in market evolution determines the limiting firm size distribution.

Suggested Citation

  • Walsh, Patrick Paul & Whelan, Ciara, 2002. "Product differentiation and firm size distribution: an application to carbonated soft drinks," LSE Research Online Documents on Economics 6745, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:6745
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    File URL: http://eprints.lse.ac.uk/6745/
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    References listed on IDEAS

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    Cited by:

    1. Franco Mariuzzo & Patrick Walsh & Ciara Whelan, 2003. "Firm Size and Market Power in Carbonated Soft Drinks," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 23(3), pages 283-299, December.
    2. Patrick Paul Walsh & Franco Mariuzzo, 2005. "Embedding Consumer Taste for Location into a Structural Model of Equilibrium," Trinity Economics Papers 200053, Trinity College Dublin, Department of Economics.
    3. Ciara Whelan, 2003. "Is equating market share to market power a sound economic principle?," Open Access publications 10197/136, School of Economics, University College Dublin.
    4. John Hutchinson, 2003. "Is there a Lower Bound to the Firm Size Distribution Comparing Transition Economies with an Established Market Economy," LICOS Discussion Papers 13503, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    5. repec:tcd:wpaper:tep3 is not listed on IDEAS

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    More about this item

    Keywords

    Firm size distribution; product differentiation; carbonated soft drinks;
    All these keywords.

    JEL classification:

    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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