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Assessing the Competitive Interaction between Private Labels and National Brands

  • William P. Putsis Jr.



  • Ronald W. Cotterill


    (Department of Agricultural and Resource Economics)

  • Ravi Dhar


    (International Center for Finance)

In this article, we employ the Linear Approximate Almost Ideal Demand System (LA/AIDS), and specify price reaction equations derived under the LA/AIDS specification. We perform intracategory analyses using data on six individual categories, as well as a pooled analysis on a sample of 125 categories and 59 geographic markets. We find that consumer response to price and promotion decisions (demand) and firm pricing behavior (supply) jointly determine observed market prices and market shares. Further, estimates of residual demand elasticities suggest that examination of partial demand elasticities alone may provide an incomplete picture of the ability of brands to raise price.

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Paper provided by Yale School of Management in its series Yale School of Management Working Papers with number ysm131.

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Date of creation: 01 Dec 1999
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Handle: RePEc:ysm:somwrk:ysm131
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