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2005) An Econometric Analysis of Brand-Level Strategic Pricing between Coca-Cola Company and PepsiCo

By Tirtha P. Dhar, Jean-paul Chavas, Ronald W. Cotterill and Brian W. Gould

Abstract

Abstract: Market structure and strategic pricing for leading brands sold by Coca Cola and Pepsi Inc. are investigated in the context of a flexible demand specification and structural price equations. This approach is more general than prior studies that rely upon linear approximations and interactions of an inherently nonlinear problem. We test for Bertrand equilibrium, Stackelberg equilibrium, collusion, and a general conjectural variation (CV) specification. This nonlinear Full Information Maximum Likelihood (FIML) estimation approach provides useful information on the nature of imperfect competition and the extent of market power

Topics: Market structure, strategic pricing, conjectural variations, price reaction, carbonated soft drinks. Ψ
Year: 2011
OAI identifier: oai:CiteSeerX.psu:10.1.1.197.9947
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