Mergers, brand competition, and the price of a pint

Joris Pinkse, Margaret E. Slade

Research output: Contribution to journalArticlepeer-review

104 Scopus citations

Abstract

Mergers in the UK brewing industry have reduced the number of national brewers from six to four. The number of brands, in contrast, has remained relatively constant. We analyze the effects of mergers on brand competition and pricing. Brand-level demand equations are estimated from a panel of draft beers. To model brand-substitution possibilities, we estimate the matrix of cross-price elasticities semiparametrically. Our structural model is used to assess the strength of brand competition along various dimensions and to evaluate the mergers. In particular, we compute equilibria of pricing games with different numbers of players.

Original languageEnglish (US)
Pages (from-to)617-643
Number of pages27
JournalEuropean Economic Review
Volume48
Issue number3
DOIs
StatePublished - Jun 2004

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

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