Estimating industry conduct using promotion data

• 成果类型: Article
• 署名作者: Michel, Christian; Paz y Mino, Jose Manuel; Weiergraeber, Stefan
• 署名单位: Charles River Associates; Barcelona School of Economics; Universidad de Chile; Indiana University System; Indiana University Bloomington
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12477
• 发表日期: 2024
• 页码: 658-683
• 关键词: oligopoly solution concept; differentiated-products; price; identification; parameters; inference

摘要

We estimate the evolution of competition in the ready-to-eat cereal industry. To separately identify detailed patterns of industry conduct from unobserved marginal cost shocks, we construct novel instruments that interact data on rival firms' promotions with measures of products' relative isolation in the characteristics space. We find strong evidence for partial price coordination among cereal manufacturers in the beginning of our sample. After a merger in 1993 conduct becomes more competitive and on average consistent with multiproduct Nash pricing. The last part of our sample is characterized by even more aggressive pricing, implying median wholesale margins of less than 5%.