Data and Code for: Oligopolistic Price Leadership and Mergers: The United States Beer Industry

We study a repeated game of price leadership in which a firm proposes supermarkups over Bertrand prices to a coalition of rivals. Supermarkups and marginal costs are recoverable from data on prices and quantities. In an application to the beer industry, we find that price leadership increases profit relative to Bertrand competition by 17% in fiscal years 2006 and 2007, and by 22% in 2010 and 2011, with the change mostly due to consolidation. We simulate two mergers, which relax incentive compatibility constraints and increase supermarkups. These coordinated effects arise even with efficiencies that offset price increases under Bertrand competition.