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

Tirtha Dhar (tdhar@uoguelph.ca), Jean-Paul Chavas (jchavas@wisc.edu), Ronald Cotterill (ron@cotterilleconomics.com) and Brian W. Gould

No 65, Food Marketing Policy Center Research Reports from University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy

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: market structure; strategic pricing; conjectural variations; price reaction; carbonated soft drinks; Demand and Price Analysis (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (3)

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Related works:
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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