Oligopolistic Price Leadership and Mergers: The United States Beer Industry

2021 ◽  
Vol 111 (10) ◽  
pp. 3123-3159
Author(s):  
Nathan H. Miller ◽  
Gloria Sheu ◽  
Matthew C. Weinberg
Keyword(s):  
United States ◽  
Incentive Compatibility ◽  
The United States ◽  
Repeated Game ◽  
Bertrand Competition ◽  
Price Leadership ◽  
Marginal Costs ◽  
Price Increases ◽  
Beer Industry ◽  
Coordinated Effects

We study a repeated game of price leadership in which a firm proposes supermarkups over Bertrand prices to a coalition of rivals. Supermarkups and marginal costs are recoverable from data on prices and quantities using the model’s structure. In an application to the beer industry, we find that price leadership increases profit relative to Bertrand competition by 17 percent in fiscal years 2006 and 2007, and by 22 percent in 2010 and 2011, with the change mostly due to consolidation. We simulate two mergers, which relax binding incentive compatibility constraints and increase supermarkups. These coordinated effects arise even with efficiencies that offset price increases under Bertrand competition. (JEL G34, K21, L13, L14, L41, L66)

Beer and Racism

2020 ◽  
Author(s):  
Nathaniel Chapman ◽  
David Brunsma
Keyword(s):  
United States ◽  
The United States ◽  
Racial Ideology ◽  
Historical Trends ◽  
Craft Beer ◽  
Origin Stories ◽  
Beer Industry ◽  
White Institutions ◽  
Theoretical Perspectives ◽  
History Of

Beer in the United States has always been bound up with race, racism, and the construction of white institutions and identities. This unique book carves a much-needed critical and interdisciplinary path to examine and understand the racial dynamics in the craft beer industry and the popular consumption of beer. The book's guiding theoretical perspectives are race and the founding of the United States; racial ideology and the boundaries of Americanity; the production of (beer as) culture; and cultural diversity and brewing. It begins with an overview of the whiteness of craft beer. Looking at the history of beer and its origin stories in the 'new world' shows that beer in the United States has always been bound up with race, racism, and the construction of white institutions and identities. Given the very quick and meteoric rise of the craft beer industry, as well as the myopic scholarly focus on economic and historical trends in the industry, the book states that there is an urgent need to take stock of the intersectional inequalities that such realities gloss over.

Gasoline in the Voter’s Pocketbook: Driving Times to Work and the Electoral Implications of Gasoline Price Fluctuations

2021 ◽  
pp. 1532673X2110434
Author(s):  
Sung Eun Kim ◽  
Joonseok Yang
Keyword(s):  
United States ◽  
Economic Burden ◽  
Presidential Election ◽  
The United States ◽  
Gasoline Prices ◽  
Election Campaigns ◽  
Gasoline Price ◽  
Electoral Accountability ◽  
Gasoline Consumption ◽  
Price Increases

Gasoline prices are often a heated topic during presidential election campaigns in the United States. Yet, presidents have limited control over gasoline prices. Do voters reward or punish the president for changes in gasoline prices? Why might voters blame the president for an outcome beyond direct presidential control? This study addresses these questions by testing the effects of gasoline prices on pocketbook retrospection by voters. To capture the personal economic burden of gasoline prices, we rely on average driving times to work, given the inelastic nature of gasoline consumption for commuting. The results provide evidence for pocketbook voting: constituencies with longer average driving times to work are more likely to hold the president accountable for gasoline price increases. These findings have broader implications regarding electoral accountability and rationality in voting.

scholarly journals Cancer Drugs: An International Comparison of Postlicensing Price Inflation

2017 ◽  
Vol 13 (6) ◽  
pp. e538-e542 ◽  
Author(s):  
Philip Savage ◽  
Sarah Mahmoud ◽  
Yogin Patel ◽  
Hagop Kantarjian
Keyword(s):  
United States ◽  
Health Care ◽  
United Kingdom ◽  
The United States ◽  
Cancer Drug ◽  
Cancer Drugs ◽  
Price Inflation ◽  
Drug Prices ◽  
The United Kingdom ◽  
Price Increases

Purpose: The cost of cancer drugs forms a rising proportion of health care budgets worldwide. A number of studies have examined international comparisons of initial cost, but there is little work on postlicensing price increases. To examine this, we compared cancer drug prices at initial sale and subsequent price inflation in the United States and United Kingdom and also reviewed relevant price control mechanisms. Methods: The 10 top-selling cancer drugs were selected, and their prices at initial launch and in 2015 were compared. Standard nondiscounted prices were obtained from the relevant annual copies of the RED BOOK and the British National Formulary. Results: At initial marketing, prices were on average 42% higher in the United States than in the United Kingdom. After licensing in the United States, all 10 drugs had price rises averaging an overall annual 8.8% (range, 1.4% to 24.1%) increase. In comparison, in the United Kingdom, six drugs had unchanged prices, two had decreased prices, and two had modest price increases. The overall annual increase in the United Kingdom was 0.24%. Conclusion: Cancer drug prices are rising substantially, both at their initial marketing price and, in the United States, at postlicensing prices. In the United Kingdom, the Pharmaceutical Price Regulation Scheme, an agreement between the government and the pharmaceutical industry, controls health care costs while allowing a return on investment and funds for research. The increasing costs of cancer drugs are approaching the limits of sustainability, and a similar government-industry agreement may allow stability for both health care provision and the pharmaceutical industry in the United States.

Endogenous Monitoring in a Partnership Game

2020 ◽  
Vol 110 (3) ◽  
pp. 776-796
Author(s):  
Anna Sanktjohanser
Keyword(s):  
United States ◽  
The United States ◽  
Repeated Game ◽  
Discount Factor ◽  
Imperfect Monitoring ◽  
Monitoring Cost ◽  
Private Signals ◽  
Public Message

I consider a repeated game in which, due to imperfect monitoring, no collusion can be sustained. I add a self-interested monitor who commits to obtain private signals of firms’ actions and sends a public message. The monitor makes an offer specifying the precision of the signals obtained and the amount to be paid in return. First, with a low monitoring cost, collusive equilibria exist. Second, collusive equilibria are monitor-preferred. Third, in monitor-preferred equilibria, firms’ payoffs are decreasing in the discount factor. My model helps explain cartel agreements between self-interested parties and firms in legal industries in the United States and Europe. (JEL C73, D43, D82, L12)

State, Ecology and Independence: Policy Responses to the Energy Crisis in the United States

1983 ◽  
Vol 13 (4) ◽  
pp. 441-462 ◽  
Author(s):  
Benny Temkin
Keyword(s):  
United States ◽  
Reagan Administration ◽  
The United States ◽  
Energy Crisis ◽  
Public Attention ◽  
Policy Responses ◽  
Price Increases ◽  
Policy Problems

The energy crisis has, at least for the time being, been replaced in newspaper headlines and public attention by other, more fashionable, and seemingly more pressing preoccupations. In the United States, for example, the dilemmas posed by the shortages and spiralling price increases of the 1970s gave way to different policy problems and the Reagan Administration has all but ceased to consider the energy question important.

scholarly journals Markets: Beer in Germany and the United States

2006 ◽  
Vol 20 (1) ◽  
pp. 189-205 ◽  
Author(s):  
William James Adams
Keyword(s):  
United States ◽  
Concentration Ratio ◽  
New Technologies ◽  
The United States ◽  
Market Size ◽  
Technological Opportunity ◽  
American Experience ◽  
Beer Industry ◽  
American Counterpart ◽  
The One

Between 1950 and 2000, the four-firm producer-concentration ratio for beer increased from 22 to 95 in the United States; and Anheuser-Busch's share of domestic output ballooned from 6 to 54 percent. In Germany, concentration has risen, but it remains low. In 2000, the four-firm producer-concentration ratio was just 29; and the eight-firm ratio in Germany was smaller than the one-firm ratio in the United States. In 2005, after five years of important mergers involving big brewers, the German beer industry was still much less concentrated than its American counterpart. In this article, I discuss several candidate explanations for the failure of beer-producer-concentration to rise as much in Germany as in the United States: the relevance of the new technologies to German brewers, the preferences of German consumers, the rules for advertising on German television and other factors, largely absent from the consensus interpretation of American experience. I find that market structure depends on a remarkably broad range of factors, extending well beyond technological opportunity and market size.

The U.S. Beer Industry: Concentration, Fragmentation, and a Nexus with Wine

2011 ◽  
Vol 6 (2) ◽  
pp. 217-230 ◽  
Author(s):  
Kenneth G. Elzinga
Keyword(s):  
United States ◽  
World War Ii ◽  
The United States ◽  
Jel Classification ◽  
Industry Concentration ◽  
World War ◽  
Product Heterogeneity ◽  
Beer Industry ◽  
Second Period ◽  
The U.S

AbstractThe U.S. Beer industry has undergone two periods of major structural change in the post-World War II period. The first period, 1950–1980, was one of consolidation in which concentration increased dramatically. Since this period, combinations among leading brewers took place that would not have passed antitrust scrutiny earlier. The second period, from 1980 on, is one of fragmentation, marked by the entry of many craft brewers and increased product heterogeneity. The fragmentation has brought about consumption complementarities between wine and beer that never existed before. The wine and beer industry both face distributional inefficiencies sustained by state regulatory provisions that were a consequence of ending prohibition in the United States. Each of these topics is explored in this paper. (JEL Classification: L66, M37)

scholarly journals Brewery Packaging in a Post-COVID Economy within the United States

Beverages ◽  
2021 ◽  
Vol 7 (1) ◽  
pp. 14
Author(s):  
Eric R. Pitts ◽  
Katherine Witrick
Keyword(s):  
United States ◽  
Supply Chain ◽  
Business Models ◽  
The United States ◽  
The Novel ◽  
Brewing Industry ◽  
Beer Industry ◽  
The World ◽  
Aluminum Cans ◽  
Novel Coronavirus

The 2020 pandemic caused by the novel coronavirus, SARS-CoV-2, also referred to as the COVID-19 [named for the disease caused by the virus] pandemic, shook the world to its core. Not only were populations hurt by the virus physically, the pandemic had deep repercussions economically as well. One of the industries severely impacted by the implications of the 2020 COVID-19 pandemic was the brewing industry, particularly that of the United States. The economic turmoil and uncertainty were felt by both macro and micro brewers alike. Draft beer sales virtually dried up overnight as state-imposed shutdowns closed bars, restaurants, and taprooms as a means to curb the spread of the virus. There were supply chain and logistical issues that arose during the pandemic due to not only closures within the brewing industry but supporting industries such as printers and shippers. In some cases, entire business models had to be turned completely on their head in an instant and business pivots had to be made. The year 2020 was wrought with challenges faced by the brewing industry. There was one saving grace however that kept many breweries afloat during the pandemic, and that was packaged beverage sales, especially those packages intended for off-site consumption. Set forth by trends of the pre-pandemic years aluminum cans and canning reigned supreme for the craft brewing market and allowed breweries to get product into the hands of consumers and ultimately allowed some breweries to stay open. Other options breweries had included the use of glass growlers or aluminum crowlers as a means to sell draft products to-go. The resourcefulness of many brewery owners was tested in 2020 and many rose to the challenge. This report aims to examine several of the challenges, pivots, and solutions packaging provided to the beer industry during the pandemic.

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