Estimating Coke and Pepsi's Price and Advertising Strategies

Golan, Amos; Karp, Larry S.; Perloff, Jeffrey M.

doi:10.2139/ssrn.506243

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Estimating Coke and Pepsi's Price and Advertising Strategies

UC Berkeley Competition Policy Center Working Paper No. CPC99-04

53 Pages Posted: 28 Feb 2004

See all articles by Amos Golan

Amos Golan

American University - Department of Economics; Santa Fe Institute; University of Oxford - Pembroke College, Oxford

Jeffrey M. Perloff

University of California, Berkeley - Department of Agricultural & Resource Economics

Date Written: July 1998

Abstract

A semi-parametric, information-based estimator is used to estimate strategies in prices and advertising for Coca-Cola and Pepsi-Cola. Separate strategies for each firm are estimated with and without restrictions from game theory. These information/entropy estimators are consistent, are efficient, and do not require distributional assumptions. These estimates are used to test theories about the strategies of firms and to see how changes in incomes or factor prices affect these strategies.

Keywords: strategies, noncooperative games, oligopoly, generalized maximum

JEL Classification: C13, C35, C72, L13, L66

Suggested Citation: Suggested Citation

Golan, Amos and Karp, Larry S. and Perloff, Jeffrey M., Estimating Coke and Pepsi's Price and Advertising Strategies (July 1998). UC Berkeley Competition Policy Center Working Paper No. CPC99-04, Available at SSRN: https://ssrn.com/abstract=506243 or http://dx.doi.org/10.2139/ssrn.506243