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