caa a22 4500 378907522 CHVBK 20180305123533.0 cr unu---uuuuu 161128e20041118xx s 000 0 eng 10.2202/1542-0485.1075 doi (NATIONALLICENCE)gruyter-10.2202/1542-0485.1075 Reimer Jeffrey J. University of Wisconsin-Madison Market Conduct in the U.S. Ready-to-Eat Cereal Industry [Elektronische Daten] [Jeffrey J Reimer] Product differentiation is well established as being the key source of the cereal industry’s high price-cost margins. However, there is little consensus as to whether pricing collusion is also a source of profitability, and indeed, whether price even serves as a strategic variable in this industry. This paper seeks to resolve this debate by determining whether cereal firms strategically interact on price, and if so, estimating the extent that this increases margins relative to what perfect collusion among firms could achieve. Firms are estimated to cooperate on price to the extent that margins are 2.5 percentage points higher than what is possible under a Nash-Bertrand game. This raises margins by about 43% of what could be achieved under a perfectly executed agreement to fix prices. The results are consistent with studies in the literature that characterize the industry’s pricing as "approximately cooperative." ©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston JEL codes: D43 nationallicence collusion nationallicence cartel nationallicence oligopoly nationallicence cereal nationallicence shared monopoly nationallicence parallel pricing nationallicence Journal of Agricultural & Food Industrial Organization De Gruyter 2/1(2004-11-18) 2:1 2004 2 jafio https://doi.org/10.2202/1542-0485.1075 text/html Onlinezugriff via DOI 1 research article jats NATIONALLICENCE 856 40 https://doi.org/10.2202/1542-0485.1075 text/html Onlinezugriff via DOI NATIONALLICENCE 100 1- Reimer Jeffrey J. University of Wisconsin-Madison NATIONALLICENCE 773 0- Journal of Agricultural & Food Industrial Organization De Gruyter 2/1(2004-11-18) 2:1 2004 2 jafio CC0 http://creativecommons.org/publicdomain/zero/1.0 nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-gruyter