Cournot Oligopoly, Homogeneous Products and Grappa Market: An Econometric Study

In this study, using scanner data, collected from super-market trans actions in 2009, we estimate an eight equations simultaneous model with a 3SLS routine, with the object ive to empirically analyse the Grappa market structure. Results show that the supply side of the Gra ppa market is characterized by an oligopolistic structure, where the dominant firms compete as oligopol ists à la Cournot with homogeneous products . Firms’ competition is mostly played on the quantity grounds and mostly disregards product differentiation strategies. The dominant f irms produce and supply a “cheap”, homogenous product. Interpretation of the results focus on cultural consumption of this very “ancient” liquor and corroborate previous studies, where hedonic analysis of the dema nd side has shows consumers’ very low/null implicit prices for the product differentiated characteristics.