EconPapers    
Economics at your fingertips  
 

Oligopoly Pricing with Differentiated Products: The Boston Fluid Milk Market Channel

Ronald Cotterill () and Tirtha Dhar ()

No 25189, Research Reports from University of Connecticut, Food Marketing Policy Center

Abstract: We model Boston fluid milk market after taking into account strategic interactions of the processors and retailers and estimate it using monthly propriety retail scanner data and other data from public sources from 1996 to 2000. Market demand is modeled using flexible nested logit demand system and processor level cost is modeled using flexible generalized Leontief cost function. Our modeled is flexible enough to capture the nature of competition between brands within store and across stores. We find that the brands compete much more vigorously within store and than across stores. This structure of competition fits squarely with Slade's (1995) assumption on retail competition. We also explore strategic implications of the North East Dairy Compact on retailers and processors using emerging methodologies of antitrust simulation. The predictions from the antitrust simulation analysis are consistent with the concept of "focal point pricing" at the Compact implementation, suggesting an increase of market power in the fluid milk marketing channel. Our estimated brand level total channel price cost margins also show that the margins increased after the Compact implementation.

Keywords: Industrial Organization; Livestock Production/Industries (search for similar items in EconPapers)
Pages: 25
Date: 2003
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29) Track citations by RSS feed

Downloads: (external link)
https://ageconsearch.umn.edu/record/25189/files/rr030074.pdf (application/pdf)

Related works:
Working Paper: Oligopoly Pricing with Differentiated Products: The Boston Fluid Milk Market Channel (2003) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:uconnr:25189

DOI: 10.22004/ag.econ.25189

Access Statistics for this paper

More papers in Research Reports from University of Connecticut, Food Marketing Policy Center Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().

 
Page updated 2021-09-26
Handle: RePEc:ags:uconnr:25189