scholarly journals Scanner Data: New Opportunities for Demand and Competitive Strategy Analysis

1994 ◽  
Vol 23 (2) ◽  
pp. 125-139 ◽  
Author(s):  
Ronald W. Cotterill
Keyword(s):  
Market Power ◽  
Price Competition ◽  
Tacit Collusion ◽  
Scanner Data ◽  
Strategy Analysis ◽  
Price Response ◽  
Oligopoly Model ◽  
Sufficient Detail ◽  
Bertrand Price Competition ◽  
Reaction Equations

This paper reviews prior research by agricultural economists on the demand for food products using scanner data. Thereafter, a differentiated product's oligopoly model with Bertrand price competition is developed and used to specify brand level demand and oligopoly price reaction equations. The model has sufficient detail to estimate brand level price elasticities and price response elasticities which in turn can be used to estimate three indices of market power. The first index estimated is the familiar Rothschild Index. The paper develops estimates two new indexes, the observed index and the Chamberlin quotient for tacit collusion. It concludes with comments on how the proposed method for the measurement of market power in a differentiated oligopoly can be improved.

scholarly journals THE DYNAMICS OF BERTRAND PRICE COMPETITION WITH COST-REDUCING INVESTMENTS

2018 ◽  
Vol 59 (4) ◽  
pp. 1681-1731 ◽  
Author(s):  
Fedor Iskhakov ◽  
John Rust ◽  
Bertel Schjerning
Keyword(s):  
Price Competition ◽  
Bertrand Price Competition

scholarly journals Extended Games Played by Managerial Firms with Asymmetric Costs

Game Theory ◽  
2014 ◽  
Vol 2014 ◽  
pp. 1-10 ◽  
Author(s):  
Leonard F. S. Wang
Keyword(s):  
Social Welfare ◽  
Price Competition ◽  
Oligopoly Model ◽  
The Social ◽  
Asymmetric Costs ◽  
Managerial Delegation ◽  
Efficiency Gap

Both demand and cost asymmetries are considered in oligopoly model with managerial delegation. It shows that (i) both efficient and inefficient firms with delegation have second move advantage under quantity setting and first move advantage under price competition; (ii) the extended games under both quantity and price competition have subgame equilibria. Lastly, the social welfare of all strategy combinations is considered to find that when the efficient firm moves first and the inefficient firm moves second under price competition, the social welfare can be higher than Bertrand case, if the efficiency gap between the two firms is huge.

scholarly journals Experiments In Bertrand Competition With Factor Markets

2010 ◽  
Vol 8 (3) ◽  
Author(s):  
Randall E. Waldron ◽  
Michael A. Allgrunn ◽  
Guoqiang Pei
Keyword(s):  
Student Satisfaction ◽  
Product Differentiation ◽  
Price Competition ◽  
Student Behavior ◽  
Student Understanding ◽  
Font Size ◽  
Market Outcomes ◽  
Classroom Experiment ◽  
Factor Markets ◽  
Bertrand Price Competition

<p class="MsoNormal" style="text-justify: inter-ideograph; text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">We present a classroom experiment which introduces product differentiation and factor markets into the traditional Bertrand framework.<span style="mso-spacerun: yes;">&nbsp; </span>We find that student behavior converges toward the market outcomes predicted by theory.<span style="mso-spacerun: yes;">&nbsp; </span>We also find that the experiment enhances student understanding of Bertrand price competition in a market with product differentiation and factor markets, and also appears to increase student satisfaction.</span></span></p>

scholarly journals MARKET POWER PERBANKAN INDONESIA

2012 ◽  
Vol 14 (3) ◽  
pp. 235-255
Author(s):  
Andi Fahmi Lubis
Keyword(s):  
Market Power ◽  
Commercial Banks ◽  
Credit Market ◽  
Structural Equations ◽  
Cost Data ◽  
Actual Cost ◽  
Oligopoly Model

This study was aimed to estimate the degree of market power exercised by commercial banks incredit market in Indonesia.Model used to answered this study’s objective was Bresnahan-Lau oligopoly model that using structural equations to estimate the degree of market power.This model was using very different approach than Structure-Conduct-Performance (SCP) paradigm that commonly used in market power studies.Without using actual cost data and accounting profit, Bresnahan-Lau model was able to estimate directly the degree of market power from structural equations. The main result of this study was the degree of market power exercised by commercial banks in credit market relatively low; in other words the degree of competition in credit market in Indonesia was quite high.Keywords: market power, oligopoly, Bresnahan-Lau, structure, performance, conduct, SCP.JEL Classification : L13, G21

scholarly journals Rebalancing the Market Power. Manufacturer and Retailer Brands in the German Food Retail Market

2015 ◽  
Vol 48 (1) ◽  
pp. 21-44
Author(s):  
Andreas Bielig
Keyword(s):  
Market Power ◽  
Price Competition ◽  
Retail Market ◽  
Food Retail ◽  
Political Implications ◽  
Total Food ◽  
Market Coverage ◽  
German Food ◽  
The Empirical Analysis ◽  
Financial Losses

Abstract The German food retail market is considered to be one of the most competitive markets worldwide. A narrow oligopoly of domestic retail chains dominates competition at the national and regional levels, driven mostly by price competition and extensive market coverage. As a result, market entrance for potential newcomers is highly restricted, even for such global players like Wal-Mart, which retreated in 2006 after nine years of substantial financial losses in Germany. There have been discernable attempts by the domestic incumbents to rebalance the traditional “task division”, affecting the range of customers choices as well as retail brands. However, within ten years the share of large retailers brands earnings in the total food retail market increased from 21.8 percent to 38.8 percent in 2012, as “house brands” optimized their assortment, increased their independence from main suppliers and squeezed out competitors. The empirical analysis presented below describes the role played by different retail brands in German food retail market as measured by their market power, and considers its political implications.

Limited Choice Sets, Local Price Response, and Implied Measures of Price Competition

1996 ◽  
Vol 33 (2) ◽  
pp. 163-173 ◽  
Author(s):  
Bart J. Bronnenberg ◽  
Wilfried R. Vanhonacker
Keyword(s):  
Price Competition ◽  
Brand Choice ◽  
Price Response ◽  
Price Search ◽  
Choice Sets ◽  
Point Of Purchase ◽  
Choice Decision ◽  
Biased Estimates ◽  
Limited Choice ◽  
Choice Set

It is becoming increasingly evident that a consumer's brand choice decision in low-involvement categories does not involve full search, evaluation, and comparison of price information of all brands available at point of purchase (global price response). The authors propose a two-stage choice process in which the consumer first identifies a subset of brands within the universal set of brands called the choice set and then evaluates only those brands that are in the choice set relative to one another to select a single brand. The authors find that, consistent with reports of the extent of external price search of consumers, response to shelf price variations is limited to the brands in the choice set (local price response). Their results indicate that employing the assumption of global price response may lead to biased estimates of price elasticity and derived measures of clout and vulnerability. To enable a managerially meaningful and useful assessment of a brand's competitive clout and vulnerability, the authors provide a brand-level approach to integrate local price response into the derivation of these measures.

14. Horizontal agreements (2): oligopoly, tacit collusion and collective dominance

2021 ◽  
pp. 588-612
Author(s):  
Richard Whish ◽  
David Bailey
Keyword(s):  
Market Power ◽  
Competition Policy ◽  
Market Failure ◽  
Competition Law ◽  
Tacit Collusion ◽  
Market Conditions ◽  
Law And Policy ◽  
Concerted Practice ◽  
Collective Dominance

Oligopoly exists where a few firms between them supply all or most of the goods or services on a market without any of them having a clear ascendancy over the others. The purpose of this chapter is to examine whether oligopoly presents a particular problem for competition policy and, if so, how that problem should be overcome. The chapter discusses the theory of oligopolistic interdependence and how oligopolies can lead to a well-known problem for competition law and policy: oligopolists are able, by virtue of the characteristics of the market, to behave in a parallel manner and to derive benefits from their collective market power without, or without necessarily, entering into an agreement or concerted practice of the kind generally prohibited by competition law. This phenomenon is known in economics as ‘tacit collusion’ and is the result of each firm’s individual and rational response to market conditions. The chapter identifies possible ways of dealing with the ‘oligopoly problem’, before considering the extent to which Articles 101 and 102 can be used to address that problem. The chapter also discusses UK law and, in particular, the possible use of the market investigations to address market failure that may arise in oligopolies.

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