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Strategic Behavior in Whiskey Distilling, 1887–1895

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  • Clay, Karen
  • Troesken, Werner

Abstract

This article shows that the Whiskey Trust used exclusive dealing and unusually low prices to deter entry and competition. Evidence of this is based on a unique dataset that allows us to estimate a firm-level demand curve for the trust, and to construct direct estimates of marginal cost. This article also shows that the strategies employed by the trust failed to deter entry. Market structure and state-level antitrust enforcement account for the failure of these strategies.

Suggested Citation

  • Clay, Karen & Troesken, Werner, 2002. "Strategic Behavior in Whiskey Distilling, 1887–1895," The Journal of Economic History, Cambridge University Press, vol. 62(4), pages 999-1023, December.
    • Handle: RePEc:cup:jechis:v:62:y:2002:i:04:p:999-1023_00
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    Cited by:

    1. George Deltas & Richard Sicotte, 2017. "Cartel Organization, Price Discrimination, and Selection of Transatlantic Migrants: 1899–1911," Southern Economic Journal, John Wiley & Sons, vol. 83(3), pages 668-704, January.
    2. Panayiotis Agisilaou, 2013. "Collusion in Industrial Economics and Optimally Designed Leniency Programmes - A Survey," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2013-03, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    3. Daniel J. Smith & Macy Scheck, 2023. "Examining the public interest rationale for regulating whiskey with the pure food and drugs act," Public Choice, Springer, vol. 196(1), pages 85-122, July.

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