*We thank the Editor and two anonymous reviewers for comments that improved this paper. The paper also benefited from valuable discussions with Alessandro Bonanno, Jean-Pierre Dubé, Avi Goldfarb, Adam Rabinowitz, Charles Rhodes, Sylvie Tchumtchoua and Gautam Tripathi. Remaining errors are our own.
ASSESSING THE IMPACT OF RETAILER STORE BRAND PRESENCE ON MANUFACTURER BRANDS IN AN EQUILIBRIUM FRAMEWORK*
Article first published online: 27 SEP 2011
© 2011 The Authors. The Journal of Industrial Economics © 2011 Blackwell Publishing Ltd and the Editorial Board of The Journal of Industrial Economics
The Journal of Industrial Economics
Volume 59, Issue 3, pages 372–395, September 2011
How to Cite
COHEN, M. A. and COTTERILL, R. W. (2011), ASSESSING THE IMPACT OF RETAILER STORE BRAND PRESENCE ON MANUFACTURER BRANDS IN AN EQUILIBRIUM FRAMEWORK. The Journal of Industrial Economics, 59: 372–395. doi: 10.1111/j.1467-6451.2011.00460.x
- Issue published online: 27 SEP 2011
- Article first published online: 27 SEP 2011
This article assesses the impact of retailer store brand products on manufacturer brand prices, profitability and consumer welfare in Boston's white fluid milk market. Estimates from a random coefficients logit demand model are used to specify and test a set of pricing games. Under the selected model, milk manufacturers are Stackelberg leaders to retailers, and store brand milks are procured by retailers at cost. The model is used to investigate counterfactual markets without retailer store brand milks. Counterfactual Simulation results indicate that store brands increase channel profits, retailer profits and consumer welfare, while having mixed effects on equilibrium retail prices.