MERGER EFFICIENCIES IN THE U.S. BOTTLED WATER INDUSTRY

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dc.contributor.advisorOlson, Larsen_US
dc.contributor.advisorSweeting, Andrewen_US
dc.contributor.authorZhang, Junen_US
dc.contributor.departmentAgricultural and Resource Economicsen_US
dc.contributor.publisherDigital Repository at the University of Marylanden_US
dc.contributor.publisherUniversity of Maryland (College Park, Md.)en_US
dc.date.accessioned2019-06-19T05:41:42Z
dc.date.available2019-06-19T05:41:42Z
dc.date.issued2019en_US
dc.description.abstractThis dissertation contributes to the literature concerning horizontal merger efficiencies and non-price competition in merger analysis. It focuses on the U.S. premium bottled water industry, where manufacturers face both price and non-price competitions. Chapter 1 gives an overview of this dissertation and chapter 2 to chapter 4 are three papers that the dissertation features. In chapter 2, I study the market power and marginal cost efficiency that was created following the merger of Coca-Cola and Glaceau in the U.S. premium bottled water market by assuming a vertical relationship between upstream manufactures and downstream retailers. In this framework, bottled water manufacturers are assumed to compete solely in prices and product attributes are exogenous. My supply-side model allows for a merger efficiency on Glaceau products by including an indicator for Glaceau products post-merger in the marginal cost function. With counterfactual simulations based on the demand and supply-side estimates, I show the merger has limited impacts on market power while marginal cost efficiency plays an important role in affecting the equilibrium prices and market shares post-merger. In chapter 3, I develop a conceptual framework by extending the vertical relation in chapter 2 to incorporate multi-dimension non-price competitions. This conceptual framework can be applied to consumer good industries with both price and non-price competitions. In this chapter, I provide a detailed description of model derivations, estimation strategies, and counterfactual simulations. In chapter 4, I apply the framework developed in chapter 3 to the merger of Coca-Cola and Glaceau and explore how horizontal merger efficiencies affect the equilibrium market outcomes considering both price and non-price competitions. To understand the underlying mechanisms that rationalize Glaceau's significant boosts in market shares, product varieties, and advertising expenditures post-merger, I estimate a structural demand and supply model where manufacturers choose wholesale prices, product varieties, and advertising, and I allow for several types of efficiencies on Glaceau. With counterfactual simulations, I show how marginal cost, product variety fixed cost, and advertising fixed cost efficiencies affect equilibrium market outcomes and consumer welfares.en_US
dc.identifierhttps://doi.org/10.13016/xtql-eez6
dc.identifier.urihttp://hdl.handle.net/1903/21949
dc.language.isoenen_US
dc.subject.pqcontrolledAgriculture economicsen_US
dc.subject.pqcontrolledEconomicsen_US
dc.subject.pquncontrolledBottled Wateren_US
dc.subject.pquncontrolledHorizontal Mergeren_US
dc.subject.pquncontrolledMerger Efficienciesen_US
dc.subject.pquncontrolledNon-price Competitionen_US
dc.titleMERGER EFFICIENCIES IN THE U.S. BOTTLED WATER INDUSTRYen_US
dc.typeDissertationen_US

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