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Title: Strategic Pricing Behavior under Asset Value Maximization
Authors: Wang,Shinn-Shyr;Stiegert,Kyle W.;Dhar,Tirtha
Contributors: 政大經濟系
Keywords: Market Value Maximization;AIDS, FIML;Model Selection
Date: 2010-06
Issue Date: 2013-09-17 15:29:12 (UTC+8)
Abstract: This paper investigates a comprehensive assessment of firm strategic behavior under financial market uncertainty. A general theoretical model of market value maximization (MVM) is constructed using a traditional capital asset pricing format. The model built on the nonlinear Almost Ideal Demand Systems (AIDS) and structural first-order conditions is developed. By full information maximum likelihood (FIML) estimation, the model evaluates pricing strategies in the U.S. margarine and butter retail markets using 4-week interval scanner data from 1998 to 2002. The model of profit maximization is rejected in favor of the MVM structure, and it indicates that financial market uncertainty plays an important role in the pricing behavior in this industry. We estimate the price elasticities of demand for leading brands and investigate the degree of market power in this industry.
Relation: Canadian Journal of Agricultural Economics, 58(2), 151-170
Data Type: article
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