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Strategic Vertical Pricing in the U.S. Butter Market 31
Du, Ying; Stiegert, Kyle W..
This article develops a methodology for empirically analyzing vertically strategic interactions in a multi-level supply channel. The model is used to analyze the vertical channel for U.S. butter manufacturing and retailing. Aggregating products to the firm level and using a nonlinear AIDS demand system under alternative strategic pricing assumptions is estimated using full information maximum likelihood (FIML) for seven geographic markets from 1998-2002. The market demand for butter was found to very price elastic. Furthermore, cross price elasticities between private labels and the two large national brands were also very elastic. The selected market structure was one indicating category profit maximization of national brands (separate from private...
Tipo: Conference Paper or Presentation Palavras-chave: Vertical interaction; Market structure; Strategic pricing; Market power; AIDS model; Butter.; Agribusiness; Agricultural and Food Policy; Consumer/Household Economics; Demand and Price Analysis; Industrial Organization; L13; L22; L66.
Ano: 2009 URL: http://purl.umn.edu/51712
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