An Econometric Analysis of Brand Level Strategic Pricing Between Coca Cola and Pepsi Inc

Tirtha Dhar (), Jean-Paul Chavas (), Ronald Cotterill () and Brian W. Gould

No 201553, Working Papers from University of Wisconsin-Madison, Department of Agricultural and Applied Economics, Food System Research Group

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.

Keywords: Food Consumption/Nutrition/Food Safety; Research and Development/Tech Change/Emerging Technologies; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 46
Date: 2002
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Citations: View citations in EconPapers (1)

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Working Paper: An Econometric Analysis of Brand Level Strategic Pricing Between Coca Cola and Pepsi Inc (2002)
Working Paper: An Econometric Analysis of Brand Level Strategic Pricing Between Coca Cola and Pepsi Inc (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uwfswp:201553

DOI: 10.22004/ag.econ.201553

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