Market Power and Joint Dominance in U.K. Brewing

31 Pages Posted: 25 Apr 2004

See all articles by Margaret E. Slade

Margaret E. Slade

University of Warwick - Department of Economics

Abstract

Market power and joint dominance are examined in U.K. brewing. I assess unilateral and coordinated effects, where the latter is equated with joint dominance, and show how one can distinguish between the two econometrically. The application makes use of two demand equations: the nested logit of McFadden [1978a] and the distance-metric of Pinske, Slade, and Brett [2002]. The two equations yield very different predictions concerning elasticities and markups. Nevertheless, although there is evidence of market power using either demand model, that power is due entirely to unilateral effects. In other words, neither model uncovers evidence of coordinated effects (tacit collusion).

Suggested Citation

Slade, Margaret E., Market Power and Joint Dominance in U.K. Brewing. Available at SSRN: https://ssrn.com/abstract=519223

Margaret E. Slade (Contact Author)

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom

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