Journal article
Understanding the Price Effects of the MillerCoors Joint Venture
Econometrica, v 85(6), pp 1763-1791
Nov 2017
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
We document abrupt increases in retail beer prices just after the consummation of the MillerCoors joint venture, both for MillerCoors and its major competitor, Anheuser-Busch. Within the context of a differentiated-products pricing model, we test and reject the hypothesis that the price increases can be explained by movement from one Nash-Bertrand equilibrium to another. Counterfactual simulations imply that prices after the joint venture are 6%-8% higher than they would have been with Nash-Bertrand competition, and that markups are 17%-18% higher. We relate the results to documentary evidence that the joint venture may have facilitated price coordination.
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Details
- Title
- Understanding the Price Effects of the MillerCoors Joint Venture
- Creators
- Nathan H. Miller - Georgetown UniversityMatthew C. Weinberg - Drexel University
- Publication Details
- Econometrica, v 85(6), pp 1763-1791
- Publisher
- Wiley
- Number of pages
- 29
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000417101400005
- Other Identifier
- 991022200097704721
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Economics
- Mathematics, Interdisciplinary Applications
- Social Sciences, Mathematical Methods
- Statistics & Probability