Cotterill, Ronald W.2021-12-272021-12-272006-07Canan, B. ve Cotterill, R. W. (2006). ''Strategic pricing in a differentiated product oligopoly model: Fluid milk in Boston''. Agricultural Economics, 35(1), 27-33.0169-51501574-0862https://doi.org/10.1111/j.1574-0862.2006.00136.xhttps://onlinelibrary.wiley.com/doi/10.1111/j.1574-0862.2006.00136.xhttp://hdl.handle.net/11452/23634In an imperfectly competitive industry, differentiated products compete with each other with price rather than quantity as the strategic variable. Several previous studies have employed a generalized Nash-Bertrand model: Liang (1989), Cotterill (1994), Cotterill et al. (2000), and Kinoshita et al. (2002); however, only Liang has explored the theoretical foundations of that model. This article generalizes the Liang two-good model to three goods. A surprising and important result follows. Price-conjectural variations do not exist in models with three or more goods. Price-reaction functions, however, exist in multiple-good models. We estimate them jointly with a brand-level demand system to evaluate the total impact of a brand manager's price change on own quantity. In a differentiated product market, this is a useful addition to a partial demand elasticity approach, because a change in one brand's price typically engenders a price reaction by other brands that affects own quantity via substantial cross-price elasticities among substitutes. Strategic pricing in the Boston fluid milk market was also influenced by the existence of a raw milk price support program, the Northeast Dairy Compact. We find that the advent of the Compact was a focal point event that crystallized a shift away from Nash-Bertrand to more cooperative pricing. If the downstream market is not competitive, one needs to consider strategic price reactions when designing and evaluating agricultural price programs.eninfo:eu-repo/semantics/closedAccessAgricultureBusiness & economicsPrice-conjectural variationsOligopolyFocal point collusionBrand-level demand elasticitiesUnited statesNorth AmericaMassachusettsBostonPrice dynamicsOligopolyMilkMarket conditionsPrivate labelsArticle0002379719000042-s2.0-337449036972733351Agricultural economics & policyEconomicsDynamic Discrete Choice; Dynamic Structural Model; Discrete Games