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Ronald W. Cotterill

Bio: Ronald W. Cotterill is an academic researcher from University of Connecticut. The author has contributed to research in topics: Market power & Oligopoly. The author has an hindex of 27, co-authored 191 publications receiving 3016 citations. Previous affiliations of Ronald W. Cotterill include University of Maryland College of Agriculture and Natural Resources & Michigan State University.


Papers
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Journal ArticleDOI
TL;DR: In this paper, the authors analyze the relationship of market concentration and market share to the prices charged by firms in local geographic markets and find that prices are significantly higher in more concentrated markets.
Abstract: Abstrac-t-The profits of leading firms in concentrated markets may be due to market share related cost efficiencies or market power. One way to identify the separate effect of market power is to analyze the relationship of market concentration and market share to the prices charged by firms in local geographic markets. This study analyzes the prices charged by supermarkets in local Vermont markets. Prices are significantly higher in more concentrated markets. The Herfindahl index, as a concentration measure, out-performs the four-firm or one-firm concentration ratio. Herfindahl marginally out-performs a firm's market share as a predictor of its price level.

273 citations

Posted Content
TL;DR: In this paper, a non-linear demand specification, the Linear Approximate Almost Ideal Demand System (LA/AIDS), is employed to estimate share and price for private labels and national brands.
Abstract: In contrast to single-equation cross-sectional studies of private label share, developing a complete understanding of the nature of the competitive interaction between national brands and private labels requires an understanding of the determinants of both demand and strategic pricing decisions by firms. Consequently, we estimate a simultaneous system of share and price for private labels and national brands. From the empirical results, two measures of market response are derived. The unilateral demand elasticity measures the pure ?own? demand response, while the residual (or ?total?) elasticity also captures the impact of competitive price reaction (Baker and Bresnahan 1985). When taken together, these provide important strategic insights into the pricing interaction between national brands and private labels. In our empirical analysis, we employ a flexible, non-linear demand specification, the Linear Approximate Almost Ideal Demand System (LA/AIDS, Deaton and Muellbauer 1980a), and specify the price reaction equations derived under the LA/AIDS demand specification. Incorporating LA/AIDS demands into a structural equation framework represents an important departure from previous demand specifications in competitive analysis. Using the proposed LA/AIDS framework, we perform a detailed intra-category analysis using data on six individual categories: bread, milk, pasta, instant coffee, butter and margarine. In addition, in an attempt to generalize the results to a broader set of categories and in order to enable us to compare our results to previous cross-section studies, we also estimate using a sample pooled across 125 categories and 59 geographic markets. Consistent with our objectives, we find that consumer response to price and promotion decisions (demand) and the factors influencing firm pricing behavior (supply) jointly determine observed market prices and market shares. Further, estimates of residual demand elasticities suggest that examination of partial demand elasticities alone may provide an incomplete picture of the ability of brands to raise price. Managerial implications, limitations and suggestion for future research are discussed.

240 citations

Journal ArticleDOI
TL;DR: In this article, the authors employ the Linear Approximate Almost Ideal Demand System (LA/AIDS) and specify price reaction equations derived under the LA/AIDS specification, and perform intracategory analyses using data on six individual categories, as well as a pooled analysis on a sample of 125 categories and 59 geographic markets.
Abstract: In this article, we employ the Linear Approximate Almost Ideal Demand System (LA/AIDS). and specify price reaction equations derived under the LA/AIDS specification. We perform intracategory analyses using data on six individual categories, as well as a pooled analysis on a sample of 125 categories and 59 geographic markets. We find that consumer response to price and promotion decisions (demand) and firm pricing behavior (supply) jointly determine observed market prices and market shares. Further, estimates of residual demand elasticities suggest that examination of partial demand elasticities alone may provide an incomplete picture of the ability of brands to raise price. Copyright 2000 by University of Chicago Press.

227 citations

Journal ArticleDOI
TL;DR: In this paper, the authors focus on the nature of demand and competitive response in the market for private label and national “branded” grocery products, and employ less restrictive functional forms than usedin prior research.
Abstract: In this paper, we focus on the nature of demand and competitive response in the market for private label and national “branded” grocery products Specifically,we employ less restrictive functional forms than usedin prior research Specifically, we incorporateLA/AIDS demands and the corresponding price reactionequations to estimate consumer price sensitivities andsupply side price strategies for national brand andprivate label products Oligopolistic priceinterdependence is explored further by specifyingbrand share, brand Herfindahl, and a measure of thestructure of the local retail markets in the supplyside relations to evaluate explicitly the impact ofmarket structure

148 citations

Journal ArticleDOI
TL;DR: In this article, a methodology for empirically examining some of the central assumptions commonly used in the theoretical literature on vertical strategic interaction was developed, using data for six individual categories across 59 local markets in 1991 and 1992.

103 citations


Cited by
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Journal ArticleDOI
TL;DR: Preface to the Princeton Landmarks in Biology Edition vii Preface xi Symbols used xiii 1.
Abstract: Preface to the Princeton Landmarks in Biology Edition vii Preface xi Symbols Used xiii 1. The Importance of Islands 3 2. Area and Number of Speicies 8 3. Further Explanations of the Area-Diversity Pattern 19 4. The Strategy of Colonization 68 5. Invasibility and the Variable Niche 94 6. Stepping Stones and Biotic Exchange 123 7. Evolutionary Changes Following Colonization 145 8. Prospect 181 Glossary 185 References 193 Index 201

14,171 citations

Posted Content
TL;DR: In this article, the authors introduce the concept of ''search'' where a buyer wanting to get a better price, is forced to question sellers, and deal with various aspects of finding the necessary information.
Abstract: The author systematically examines one of the important issues of information — establishing the market price. He introduces the concept of «search» — where a buyer wanting to get a better price, is forced to question sellers. The article deals with various aspects of finding the necessary information.

3,790 citations

Journal ArticleDOI
TL;DR: The authors empirically examined the ready-to-eat cereal industry and concluded that the prices in the industry are consistent with noncollusive pricing behavior, despite the high price-cost margins.
Abstract: The ready-to-eat cereal industry is characterized by high concentration, high price-cost margins, large advertising-to-sales ratios, and numerous introductions of new products. Previous researchers have concluded that the ready-to-eat cereal industry is a classic example of an industry with nearly collusive pricing behavior and intense nonprice competition. This paper empirically examines this conclusion. In particular, I estimate price-cost margins, but more importantly I am able empirically to separate these margins into three sources: (i) that which is due to product differentiation; (ii) that which is due to multi-product firm pricing; and (iii) that due to potential price collusion. The results suggest that given the demand for different brands of cereal, the first two effects explain most of the observed price-cost margins. I conclude that prices in the industry are consistent with noncollusive pricing behavior, despite the high price-cost margins. Leading firms are able to maintain a portfolio of differentiated products and influence the perceived product quality. It is these two factors that lead to high price-cost margins.

1,595 citations

Book ChapterDOI
TL;DR: The recent increase in the number of such studies and substantial advances in the methods for carrying them out constitute a dramatic shift in the focus of empirical work in the industrial organization (IO) field as discussed by the authors.
Abstract: Publisher Summary This chapter describes the econometric studies of market power in single markets and in groups of related markets. The recent increase in the number of such studies and substantial advances in the methods for carrying them out constitute a dramatic shift in the focus of empirical work in the industrial organization (IO) field. The chapter discusses time series data from single industries or on data from closely related markets. The new empirical industrial organization (NEIO) is clearly somewhat different than the previously dominant empirical method in the field, the structure–conduct–performance paradigm (SCPP). The chapter presents the formation and enforcement of tacitly collusive arrangements, the nature of noncooperative oligopoly interaction in the world, the degree of single-firm market power under product differentiation, and the size and determinants of the industry price-cost margin. It reviews the various empirical models of monopoly power and of oligopoly interaction and describes the theoretical and empirical arguments for why it is monopoly power that is being measured.

1,570 citations