Evaluating the Unilateral Price and Variety Effects of Horizontal Mergers

Industrial Organization,

Pricing Power by Supermarket Retailers: A Ghost in the Machine?

Agribusiness, L13, L66, Q13,

Obesity and Hyperbolic Discounting: An Experimental Analysis

Behavioral economists maintain that addictions such as alcoholism, smoking and over-eating represent examples of present-bias in decision making that is fundamentally irrational. In this article, we develop a model of present bias and apparently hyperbolic discounting that is fully consistent with rational behavior. We construct an experiment to test our hypothesis and to determine whether discount rates differ for individuals who engage in behaviors that could endanger their health. Our results show that discount functions are quasi-hyperbolic in shape, and that obesity and drinking are positively related to the discount rate. Anti-obesity policy, therefore, would be best directed to informing individuals as to the long-term implications of short-term gratification, rather than taxing foods directly.addiction, discounting, experiments, hyperbolic, obesity, time-inconsistency., Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, Institutional and Behavioral Economics, C91, D12, D91, I18.,

OBESITY AND HYPERBOLIC DISCOUNTING: AN EXPERIMENTAL ANALYSIS

Behavioral economists maintain that addictions such as alcoholism, smoking and over-eating represent examples of present-bias in decision making that is fundamentally irrational. In this article, we develop a model of present bias and apparently hyperbolic discounting that is fully consistent with rational behavior. We construct an experiment to test our hypothesis and to determine whether discount rates differ for individuals who engage in behaviors that could endanger their health. Our results show that discount functions are quasi-hyperbolic in shape, and that obesity and drinking are positively related to the discount rate. Anti-obesity policy, therefore, would be best directed to informing individuals as to the long-term implications of short-term gratification, rather than taxing foods directly.addiction, discounting, experiments, hyperbolic, obesity, time-inconsistency, Agricultural and Food Policy, Consumer/Household Economics, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Health Economics and Policy, C91, D12, D91, I18,

Commodity Price Pass-Through in Differentiated Retail Food Markets

Prices for nearly all basic commodity rose at unprecedented rates throughout early 2008, only to fall nearly as fast as financial markets and global economies began to collapse. Rising food prices in 2008 led to concerns that commodity price spikes would lead to more general food inflation, but by early 2009 interest focused more on the seeming inability of food prices to fall back down with commodity prices. This study provides an empirical investigation into the pass-through of commodity prices to retail prices for two different types of food products: potatoes and fluid milk. The results show that pass-through depends on the nature of the food in question, but is generally consistent with theoretical models of pricing by sellers of multiple, differentiated products. In particular, pass-through rates tend to be lower for processed (differentiated) products during periods of falling input prices than when input prices are rising. For less processed products, pass-through tends to be higher during regimes of both rising and falling input prices. Our results show that pass-through depends on the degree of pricing power possessed by all channel members and, more generally, suggest a nuanced approach to understanding retail food price inflation.commodity prices, conduct, industrial organization, inflation, market power, nested logit, pass-through, random parameters model, Consumer/Household Economics, Demand and Price Analysis, Industrial Organization, C35, D12, D43, L13, L41, Q13,

What is a Beverage Worth? Arbitrage Pricing and the Value of New Products: An Attribute-Space Approach

We empirically estimate the valuation of new carbonated soft drink products within a model of market value maximization. We show that equity value is an important consideration in the firm decision to differentiate or imitate in new product introductions. Our results indicate that differentiation is a marginally better strategy for new product introductions as opposed to imitation of existing products. This finding is quite logical given the already high levels of imitative competition existing in the carbonated soft drink category

Supply Channel Stage-Games and Horizontal Merger Simulation in the Refrigerated Orange Juice Industry

This paper seeks to explore the implementation of more realistic supply channel interactions in merger simulation. In particular, a two-stage pricing game is used to conduct merger simulations in the refrigerated orange juice category. The major finding is that practical use of stage-game modeling in merger simulation will not be possible until the relationship between demand specification and retail pass-through rates is better understood