|
|
|
|
||||
|
||||
The First-Order Approach to Merger AnalysisSonia JaffeHarvard University - Department of Economics E. Glen WeylUniversity of Chicago; University of Toulouse 1 - Toulouse School of Economics January 7, 2013 American Economic Journal: Microeconomics, Forthcoming Harvard Economics Department Working Paper Abstract: Using information local to the pre-merger equilibrium, we derive approximations of the expected changes in prices and welfare generated by a merger. We extend the pricing pressure approach of recent work to allow for non-Bertrand conduct, adjusting the diversion ratio and incorporating the change in anticipated accommodation. To convert pricing pressures into quantitative estimates of price changes, we multiply them by the merger pass-through matrix, which (under conditions we specify) is approximated by the pre-merger rate at which cost increases are passed through to prices. Weighting the price changes by quantities gives the change in consumer surplus.
Number of Pages in PDF File: 32 Keywords: horizontal merger guidelines, comparative statics, local approximation JEL Classification: D43, K21, L41 Accepted Paper SeriesDate posted: February 20, 2011 ; Last revised: April 6, 2013Suggested CitationContact Information
|
|
|||||||||||||||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo3 in 0.891 seconds
