Data and Code for: "Dynamic Oligopoly Pricing with Asymmetric Information: Implications for Horizontal Mergers"

Principal Investigator(s): View help for Principal Investigator(s) Andrew Sweeting, University of Maryland College Park; Xuezhen Tao, Shanghai University of Finance and Economics; Xinlu Yao, Independent Research (c/o UMD)

Version: View help for Version V1

Name	File Type	Size	Last Modified
contin_merger			12/12/2023 10:30:AM
contin_symmetric_N2			12/12/2023 10:30:AM
discrete_asymmetric_4to3			12/12/2023 10:31:AM
discrete_asymmetric_N3			12/12/2023 10:31:AM
discrete_failure			12/12/2023 10:31:AM
discrete_symmetric_N2N7			12/12/2023 10:31:AM
discrete_varyingdivrho_N2			12/12/2023 10:31:AM
empirical			12/12/2023 10:32:AM
empirical_nomex			12/12/2023 10:32:AM
pyblp			12/12/2023 10:32:AM

Project Citation:

Sweeting, Andrew, Tao, Xuezhen , and Yao, Xinlu. Data and Code for: “Dynamic Oligopoly Pricing with Asymmetric Information: Implications for Horizontal Mergers.” Nashville, TN: American Economic Association [publisher], 2024. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2024-07-29. https://doi.org/10.3886/E192405V1

Project Description

Summary: We model repeated pricing by differentiated product firms when each firm has private information about its serially-correlated marginal cost. In a fully separating equilibrium of the dynamic game, signaling incentives can lead equilibrium prices to be significantly above those in a static, complete information game, even when the possible variation in the privately-observed state variables is very limited. We calibrate our model using data from the beer industry, and show that, without any change in conduct, our model can explain increases in price levels and changes in price dynamics and cost pass-through after the 2008 MillerCoors joint venture.

This archive contains MATLAB code to replicate the computational examples in the paper (i.e., the results outside of Section 3 and online Appendix C). Fake data moments are provided that will produce calibration and counterfactual results similar, but not quite identical to, the baseline specification calibration and counterfactual results in the paper. If proprietary IRI Academic Data Set is available (see citations in the README) STATA and MATLAB code is provided to generate the Section 3 and Appendix C tables and figures.

Funding Sources: National Science Foundation (SES-1658670); National Natural Science Foundation of China (72003120)

Scope of Project

Subject Terms: oligopoly; asymmetric information; signaling; mergers; dynamic games

JEL Classification:
      D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
      D82 Asymmetric and Private Information; Mechanism Design
      L13 Oligopoly and Other Imperfect Markets
      L41 Monopolization; Horizontal Anticompetitive Practices
      L66 Food; Beverages; Cosmetics; Tobacco; Wine and Spirits

Geographic Coverage: United States (data not included in deposit)

Time Period(s): 1/1/2001 – 12/31/2011

Data Type(s): program source code

Collection Notes: This is a code repository. The paper uses the IRI Academic dataset with citations and links in README. One file (linking week codes to dates) is supplied. A "fake" data set of moments is provided so that the calibration and counterfactual code can be run.

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V1 [2024-07-29]

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