Firm Size and Market Power in Carbonated Soft Drinks

Franco Mariuzzo, Patrick Walsh () and Ciara Whelan

Review of Industrial Organization, 2003, vol. 23, issue 3_4, 283-299

Abstract: Sutton (1998) offers us a simple way to model firm size distributions across differentiated products industries. We analyse the implications of this approach for company markups using a structural model for a specific industry. We incorporate the complexities of multi-product (brand) companies operating with different (strategic) configurations of product characteristics and stores to estimate brand markups, using Irish AC Nielsen retail data for Carbonated Soft Drinks. As a second step we estimate that market power does not increase in companies with higher market share, controlling for other factors. This challenges a traditional mind-set.

Date: 2003
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