Upward pricing pressure as a predictor of merger price effects
| Autor: | Gloria Sheu, Conor Ryan, Nathan H. Miller, Marc Remer |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Economics and Econometrics
Strategy and Management Mean squared prediction error 05 social sciences Economics Econometrics and Finance (miscellaneous) Monte Carlo method Simulation modeling Convexity Orders of approximation 0502 economics and business Industrial relations Economics Merger simulation 050207 economics Mathematical economics 050205 econometrics |
| Zdroj: | International Journal of Industrial Organization. 52:216-247 |
| ISSN: | 0167-7187 |
| DOI: | 10.1016/j.ijindorg.2017.01.010 |
| Popis: | We use Monte Carlo experiments to evaluate whether “upward pricing pressure” (UPP) accurately predicts the price effects of mergers, motivated by the observation that UPP is a restricted form of the first order approximation derived in Jaffe and Weyl (2013). Results indicate that UPP is quite accurate with standard log-concave demand systems, but understates price effects if demand exhibits greater convexity. Prediction error does not systematically exceed that of misspecified simulation models, nor is it much greater than that of correctly-specified models simulated with imprecise demand elasticities. The results also support that UPP provides accurate screens for anticompetitive mergers. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|
Full Text from ScienceDirect