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

Geoffrey M. Pofahl

No 6257, 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: 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.

Keywords: Demand and Price Analysis; Marketing (search for similar items in EconPapers)
Pages: 34
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea08:6257

DOI: 10.22004/ag.econ.6257

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