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Firm Size and Market Power in Carbonated Soft Drinks

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Abstract

Sutton (1998) offers us a simple way to model firm size distributions across differentiated products industries. We analyse the implications of this approach for company markups using a structural model for a specific industry. We incorporate the complexities of multi-product (brand) companies operating with different (strategic) configurations of product characteristics and stores to estimate brand markups, using Irish AC Nielsen retail data for Carbonated Soft Drinks. As a second step we estimate that market power does not increase in companies with higher market share, controlling for other factors. This challenges a traditional mind-set.

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Authors and Affiliations

  1. Department of Economics, University of Venice, Italy

    Franco Mariuzzo

  2. Department of Economics, Trinity College, Dublin, Ireland

    Patrick Paul Walsh

  3. Department of Economics, University College, Dublin, Ireland

    Ciara Whelan

Authors
  1. Franco Mariuzzo
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  2. Patrick Paul Walsh
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  3. Ciara Whelan
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Mariuzzo, F., Walsh, P.P. & Whelan, C. Firm Size and Market Power in Carbonated Soft Drinks. Review of Industrial Organization 23, 283–299 (2003). https://doi.org/10.1023/B:REIO.0000031369.95080.9f

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  • DOI: https://doi.org/10.1023/B:REIO.0000031369.95080.9f

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