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Evaluating Coordinated E¤ects: An application to the US beer industry


  • Frederik Beelitz

    (University of Oxford)


The paper brings Friedman?s (1971) collusive game to data and investigates whether the merger between the ?fth and fourth largest brewer (G. Heileman and Stroh) of the US beer industry in the mid 1990?s had a signi?cant impact on the incentives to collude in the industry. It does so by ?rstly estimating a random coe¢ cient Logit demand system for the US beer market. In a second step the demand estimates are used to conduct a merger simulation (Davis, 2006) quantifying coordinated e¤ects of the merger. The results show that the change in the likelihood of collusion for the non merging parties was negligible, but signi?cantly increased for the merged party.

Suggested Citation

  • Frederik Beelitz, 2009. "Evaluating Coordinated E¤ects: An application to the US beer industry," Food Marketing Policy Center Research Reports 114, University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy.
  • Handle: RePEc:zwi:fpcrep:114

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