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Seminar in Economics | Pierre Dubois

Department of Economics welcomes you to a seminar with Pierre Dubois, Toulouse School of Economics who will present “Soda Taxes and Advertising Dynamics”.

Welcome to this Higher Seminar in Economics organised by the Department of Economics, SSE. The seminar speaker is Pierre Dubois, Toulouse School of Economics presenting “Soda Taxes and Advertising Dynamics”.

Abstract

Soda taxes are commonly used to reduce sugar consumption. The effects of taxes on prices and consumption have been widely studied, however there is less work on the impact of taxes on firms' strategic choices over advertising spending. We study how soda taxes affect both pricing and advertising strategies of firms in a dynamic oligopoly game. We use rich longitudinal data to estimate an equilibrium model of the cola market. We exploit an institutional feature of the advertising market that involves cola firms delegating decisions over advertising spots to agencies. This allows us to model the rich impacts of advertising on demand, while solving the otherwise intractable dynamic equilibrium impact of the introduction of a tax. We find that the dynamic competition game between the main players (Coca Cola and Pepsi) results in asymmetric responses in advertising spending, with both firms reducing advertising expenditure in response to a sugary soda tax.

Pierre Dubois is a professor of Economics at TSE, a fellow of the CEPR and of the Institute for Fiscal Studies in London. His work includes research on industrial organization, demand models, household behavior, health and pharmaceuticals, food demand, development economics, and applied econometrics.

The seminar takes place at Stockholm School of Economics, Sveavägen 65, room 750.

Please contact fanni.antal@hhs.se if you have any questions.

Dept. of Economics Economics Seminar in economics