1. Soda Market Shares

2. Soda Market Shares 2008 1. Coke Classic 17.2% 2. Pepsi Cola 10.7%
3. Diet Coke %
4. Mountain Dew %
5. Diet Pepsi %
6. Dr. Pepper %
7. Sprite %
8. Fanta %
9. Diet Mountain Dew %
10. Diet Dr. Pepper %
Competitive Fringe %

3. Soda Market Shares 2009 1. Coke Classic 17.0% 2. Pepsi Cola 9.9%
3. Diet Coke %
4. Mountain Dew %
5. Dr. Pepper %
6. Diet Pepsi %
7. Sprite %
8. Diet Mountain Dew %
9. Fanta %
10. Diet Dr. Pepper %
Competitive Fringe %

4. Soda Market Shares (CSD) Companies 2009
Coca-Cola
PepsiCo
Dr. Pepper Snapple
Cott Corp. (RC Cola, Wal-Mart, etc)
National Beverage (Shasta Faygo)
Hansen Natural (Monster)
Red Bull
Big Red (Nesbitt’s, Big Red)
Rockstar
Other

5. Anti-Trust Legislation
Anti-Monopoly Legislation
Used to promote Competition

6. Sherman Anti-Trust Act 1890
Made illegal “restraint of free trade”
Laid foundation for future
Did not define key terms
Made prosecutions difficult
Standard Oil (1911)
John D. Rockefeller

7. Clayton Anti-Trust Act 1914
Contained Specifics
Price Discrimination
Tied Sales
Mergers that reduce competition
Interlocking Boards of Directors
Allowed injured parties to sue
Treble Damages (3x)

8. Should Northwest & Delta airlines be allowed to merge?
2006 Market Shares
American 15.5%
United %
Southwest 11.8%
Delta %
Continental %
Northwest %
US Airways %
JetBlue %
America West 3.8%
Alaska %
Other %
2007 Market Shares
American 14.9%
Southwest 12.9%
United %
Delta %
Continental %
US Airways %
Northwest %
JetBlue %
AirTran %
Alaska %
Other %

9. Airline Share American 14.1% 13.8% Southwest 13.5% 13.8%
July ’09 Sept 2010
American % 13.8%
Southwest % 13.8%
Delta % 11.8%
United % 10.4%
US Airways 8.3% 8.0%
Continental 7.6% 7.6%
Northwest 6.3% 4.8%
JetBlue 4.2% 4.3%
AirTran % 3.4%
Alaska % 3.1%
Other % 19.0%

10. Federal Trade Commission 1914
Regulates
Anti-Competitive Business Behavior
Consumer Protection
False & Misleading Advertising
1st Amendment Right – no prior restraint
Can Issue “Cease and Desist Order”

11. Recent Anti-Trust Cases
ATT break-up into “Baby Bells” 1984
Bell system was a “natural monopoly”
Developed over 30 years – land lines
New technology allowed competition
Long Distance was first – Sprint, MCI
Now Cell Phones – market solution

12. Recent Anti-Trust Cases
USFL – NFL 1986
USFL set up new football league
Sued NFL for damages – won
NFL is a Monopoly – Damages $1

13. Recent Anti-Trust Cases
Microsoft
Tied sale - Windows & Explorer
Unfair to Netscape Navigator & others
Microsoft settled with DOJ

14. Oligopoly Behavior
Game Theory – study of how people behave in strategic situations
Nash Equilibrium – individual chooses the best strategy considering the strategy that all others have chosen
John Nash – Nobel Prize in Economics
A Beautiful Mind

15. Duopoly Golden Balls – British Game Show video clip
Split
Steal
50,075 each
0 / 100,150
100,150 / 0

16. Oligopoly Firms “play the game” repeatedly
When game is played repeatedly a dominate strategy develops.