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How Brand Names Affect the Price Setting of Carmakers Producing Twin Cars?

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  • Nora LADO
  • Omar LICANDRO
  • Francisco PÉREZ

Abstract

In the automobile sector, it is a usual practice that independent carmakers engage in the development and production of a common car model, the so-called twin cars. From the point of view of the marketing literature, we claim that carmakers should not charge different brand premia on separate models of a twin car. We use hedonic regressions and panel data estimators to valuate brand premia, by controlling for quality diversity. We find that there are no significant differences between brand premia of separate models of a twin car, even if brand premia may differ across different carmakers.

Suggested Citation

  • Nora LADO & Omar LICANDRO & Francisco PÉREZ, 2004. "How Brand Names Affect the Price Setting of Carmakers Producing Twin Cars?," Economics Working Papers ECO2004/01, European University Institute.
    • Handle: RePEc:eui:euiwps:eco2004/01
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    1. M Esteban-Bravo & N Lado, 2011. "Brand value in horizontal alliances: the case of twin-cars," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 62(8), pages 1533-1542, August.
    2. Bourreau, Marc & Doğan, Pınar & Manant, Matthieu, 2016. "Size of RJVs with partial cooperation in product development," International Journal of Industrial Organization, Elsevier, vol. 46(C), pages 77-106.
    3. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899, January.
    4. Andrew T. Ching & Masakazu Ishihara, 2012. "Measuring the Informative and Persuasive Roles of Detailing on Prescribing Decisions," Management Science, INFORMS, vol. 58(7), pages 1374-1387, July.
    5. Bourreau, Marc & Dogan, Pinar & Manant, Matthieu, 2010. "Size of RJVs and Degree of Cooperation in Product Development," Scholarly Articles 4621101, Harvard Kennedy School of Government.
    6. José A. Herce, "undated". "Could this ever happen in Spain? Economic and policy aspects of a SARS-like episode," Working Papers 2004-09, FEDEA.

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    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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