Post and Hold Regulation and Competitive Conduct: Evidence from the U.S. Beer Industry

Philip Gayle () and Adeel Faheem

MPRA Paper from University Library of Munich, Germany

Abstract: The literature argues that Post and Hold (PH) laws facilitate tacit collusive price-setting behavior among suppliers of alcoholic beverages. Yet there is no explicit empirical test of this claim. We specify and estimate a structural model designed to identify the extent to which PH laws induce tacit collusive price-setting behavior among beer suppliers. Our estimates reveal evidence of PH law-induced collusive behavior that causes higher prices and lower consumption. Furthermore, we find that an alcohol content tax as a replacement for PH regulation yields the highest surplus to consumers compared to a sales tax or the PH regulation.

Keywords: Post and Hold Regulation; Competitive Conduct; US Beer Industry; Externality; Corrective Tax Policy (search for similar items in EconPapers)
JEL-codes: H21 H23 I18 K00 L13 L40 L66 (search for similar items in EconPapers)
Date: 2024-10-22
New Economics Papers: this item is included in nep-com, nep-ind, nep-law, nep-pbe and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:122541

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