Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/235199
Authors: 
Pröll, Simon
Salhofer, Klaus
Karagiannis, Giannis
Year of Publication: 
2019
Series/Report no.: 
Diskussionspapier No. DP-73-2019
Abstract: 
The beer market in Germany may be described as a monopolistic competition with many breweries supplying a very large variety of different beer styles and brands. Advertising is one means of differentiating a product and increasing prices over marginal costs. Based on production data obtained from a sample of 197 German breweries and thirteen years of observation, we derive firm-specific markups, profit ratios and prices in each year and relate those to their advertising expenditures and firm size. We are able to show that advertising expenditures are positively correlated to a brewery's markup, profit ratio and price while firm size is negatively correlated.
Subjects: 
advertising
markup
imperfect competition
brewing
JEL: 
D22
L11
L66
Document Type: 
Working Paper

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