The Dynamics of Industry Concentration for U.S. Micro and Macro Brewers

The Dynamics of Industry Concentration for U.S. Micro and Macro Brewers In this update we document the changes in industry concentration of macro and micro brewers in the U.S. brewing industry since 1970. Technological change and the continued success of Anheuser–Busch forced the macro brewers into a war-of-attrition game and contributed to rising concentration in the macro sector of the industry. Homogenization of the beer produced by macro brewers, changes in local demand conditions, and a more favorable regulatory environment created profitable niches in many local markets for micro brewery beer, and entry into this sector occurred at a phenomenal rate from 1977 to 1998. Consistent with several models of industry dynamics, over-exuberance led to a shakeout as the number of micro breweries fell by over 16% from 1998 to 2002. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

The Dynamics of Industry Concentration for U.S. Micro and Macro Brewers

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2005 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-004-8114-9
Publisher site
See Article on Publisher Site

Abstract

In this update we document the changes in industry concentration of macro and micro brewers in the U.S. brewing industry since 1970. Technological change and the continued success of Anheuser–Busch forced the macro brewers into a war-of-attrition game and contributed to rising concentration in the macro sector of the industry. Homogenization of the beer produced by macro brewers, changes in local demand conditions, and a more favorable regulatory environment created profitable niches in many local markets for micro brewery beer, and entry into this sector occurred at a phenomenal rate from 1977 to 1998. Consistent with several models of industry dynamics, over-exuberance led to a shakeout as the number of micro breweries fell by over 16% from 1998 to 2002.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Dec 23, 2004

References

  • The Generalized War of Attrition
    Bulow; Jeremy, I.; Klemperer, Paul D.

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