IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v52y2004i1p133-163.html
   My bibliography  Save this article

Market Power and Joint Dominance in U.K. Brewing

Author

Listed:
  • Margaret E. Slade

Abstract

Market power and joint dominance are examined in U.K. brewing. I assess unilateral and coordinated effects, where the latter is equated with joint dominance, and show how one can distinguish between the two econometrically. The application makes use of two demand equations: the nested logit of McFadden [1978a] and the distance‐metric of Pinkse, Slade, and Brett [2002]. The two equations yield very different predictions concerning elasticities and markups. Nevertheless, although there is evidence of market power using either demand model, that power is due entirely to unilateral effects. In other words, neither model uncovers evidence of coordinated effects (tacit collusion).

Suggested Citation

  • Margaret E. Slade, 2004. "Market Power and Joint Dominance in U.K. Brewing," Journal of Industrial Economics, Wiley Blackwell, vol. 52(1), pages 133-163, March.
    • Handle: RePEc:bla:jindec:v:52:y:2004:i:1:p:133-163
    DOI: 10.1111/j.0022-1821.2004.00219.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.0022-1821.2004.00219.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.0022-1821.2004.00219.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Joris Pinkse & Margaret E. Slade & Craig Brett, 2002. "Spatial Price Competition: A Semiparametric Approach," Econometrica, Econometric Society, vol. 70(3), pages 1111-1153, May.
    2. Slade, Margaret E, 1998. "Beer and the Tie: Did Divestiture of Brewer-Owned Public Houses Lead to Higher Beer Prices?," Economic Journal, Royal Economic Society, vol. 108(448), pages 565-602, May.
    3. Jith Jayaratne & Carl Shapiro, 2000. "Simulating Partial Asset Divestitures to 'Fix' Mergers," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 7(2), pages 179-200.
    4. Aviv Nevo, 2000. "Mergers with Differentiated Products: The Case of the Ready-to-Eat Cereal Industry," RAND Journal of Economics, The RAND Corporation, vol. 31(3), pages 395-421, Autumn.
    5. Werden, Gregory J & Froeb, Luke M, 1994. "The Effects of Mergers in Differentiated Products Industries: Logit Demand and Merger Policy," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 10(2), pages 407-426, October.
    6. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-890, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Slade, Margaret E., 2006. "Merger Simulations of Unilateral Effects : What Can We Learn from the UK Brewing Industry?," The Warwick Economics Research Paper Series (TWERPS) 767, University of Warwick, Department of Economics.
    2. Ivaldi, Marc & Verboven, Frank, 2005. "Quantifying the effects from horizontal mergers in European competition policy," International Journal of Industrial Organization, Elsevier, vol. 23(9-10), pages 669-691, December.
    3. Kaplow, Louis & Shapiro, Carl, 2007. "Antitrust," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 2, chapter 15, pages 1073-1225, Elsevier.
    4. Mitsukuni Nishida, 2015. "Estimating a Model of Strategic Network Choice: The Convenience-Store Industry in Okinawa," Marketing Science, INFORMS, vol. 34(1), pages 20-38, January.
    5. Maxim Sinitsyn, 2020. "Evaluating horizontal mergers in the presence of price promotions," Quantitative Marketing and Economics (QME), Springer, vol. 18(1), pages 39-60, March.
    6. van Damme, E.E.C. & Pinkse, J., 2005. "Merger simulation analysis : An academic perspective," Other publications TiSEM 5101426e-e093-4dfe-b8f5-1, Tilburg University, School of Economics and Management.
    7. Peter Davis & Pasquale Schiraldi, 2014. "The flexible coefficient multinomial logit (FC-MNL) model of demand for differentiated products," RAND Journal of Economics, RAND Corporation, vol. 45(1), pages 32-63, March.
    8. Pham, Vivienne & Prentice, David, 2010. "An empirical analysis of the counterfactual: a merger and divestiture in the Australian cigarette industry," MPRA Paper 26713, University Library of Munich, Germany.
    9. Philippe Choné & Lionel Wilner, 2022. "Financial Incentives and Competitive Pressure: The Case of the Hospital Industry," Journal of the European Economic Association, European Economic Association, vol. 20(2), pages 626-666.
    10. Martin S. Gaynor & Samuel A. Kleiner & William B. Vogt, 2013. "A Structural Approach to Market Definition With an Application to the Hospital Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 61(2), pages 243-289, June.
    11. Victor Aguirregabiria & Margaret Slade, 2017. "Empirical models of firms and industries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(5), pages 1445-1488, December.
    12. Oliver Budzinski & Isabel Ruhmer, 2010. "Merger Simulation In Competition Policy: A Survey," Journal of Competition Law and Economics, Oxford University Press, vol. 6(2), pages 277-319.
    13. Jerome Foncel & Marc Ivaldi & Jrisy Motis, 2008. "An Econometric Workbench for Comparing the Substantive and Dominance Tests in Horizontal Merger Analysis," Working Papers 0833, University of Crete, Department of Economics.
    14. Gautam Gowrisankaran & Aviv Nevo & Robert Town, 2015. "Mergers When Prices Are Negotiated: Evidence from the Hospital Industry," American Economic Review, American Economic Association, vol. 105(1), pages 172-203, January.
    15. Cosnita-Langlais, Andreea, 2012. "Horizontal market concentration: Theoretical insights from spatial models," Research in Economics, Elsevier, vol. 66(1), pages 22-32.
    16. Matthias Firgo & Agnes Kügler, 2014. "Detecting Collusion in Spatially Differentiated Markets," Department of Economics Working Papers wuwp188, Vienna University of Economics and Business, Department of Economics.
    17. Town, Robert, 2001. "The welfare impact of HMO mergers," Journal of Health Economics, Elsevier, vol. 20(6), pages 967-990, November.
    18. Grieco, Paul & Pinkse, Joris & Slade, Margaret, 2018. "Brewed in North America: Mergers, marginal costs, and efficiency," International Journal of Industrial Organization, Elsevier, vol. 59(C), pages 24-65.
    19. Bokhari, Farasat A.S. & Mariuzzo, Franco, 2018. "Demand estimation and merger simulations for drugs: Logits v. AIDS," International Journal of Industrial Organization, Elsevier, vol. 61(C), pages 653-685.
    20. James Gaisford & Stefan Lutz, 2007. "A Multi-Product Framework Generating Waves of Mergers and Divestitures," ICER Working Papers 36-2007, ICER - International Centre for Economic Research.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:52:y:2004:i:1:p:133-163. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.