Research event

Oligopolistic price leadership and mergers: The United States beer industry

This event is a part of the Berlin Applied Micro Seminar (BAMS) research seminar series which is jointly organized by the DIW, Hertie School, Humboldt-Universität zu Berlin, Freie Universität Berlin, TU Berlin and WZB.

Join us for a presentation by Nathan Miller of Georgetown University.

About the speaker:
Nathan Miller
is the Saleh Romeih Associate Professor at the Georgetown University McDonough School of Business. His research covers topics in the fields of industrial organization and antitrust economics, with a recent focus on collusion and the competitive effects of mergers. He has published articles in the American Economic ReviewEconometrica, and the RAND Journal of Economics, among other journals. Prior to joining Georgetown University, Professor Miller served as an economist at the U.S. Department of Justice, where he provided economic analysis for antitrust investigations, including the merger review of AT&T and T-Mobile. He holds a Ph.D. in economics from the University of California, Berkeley and a B.A. from the University of Virginia.

We study an infinitely-repeated game of oligopolistic price leadership in which one firm, the leader, proposes a supermarkup over Bertrand prices to a coalition of rivals. We estimate the model with aggregate scanner data on the beer industry and find the supermarkup accounts for 6% of price. Price leadership increases profit by 8.9% relative to Bertrand competition, and decreases consumer surplus by nearly four times the change in profit. We use the model to simulate the ABI/Modelo merger. The merger relaxes incentive compatibility constraints and increases the equilibrium supermarkup. Merger efficiencies do not mitigate – and can amplify –this coordinated effect.
The BAMS is a research seminar which is jointly organized by the DIW, Hertie School, Humboldt University, Free University, TU Berlin and WZB and co-funded by the Berlin Centre for Consumer Policies (BCCP) and Collaborative Research Center "Transregio" (SFB/TR 190).

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Prior registration is not necessary.