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The Wfi-Calculator

Amsterdam Center for Law & Economics Working Paper No. 2006-11

Posted: 12 Aug 2006

See all articles by Marie Goppelsroeder

Marie Goppelsroeder

University of Amsterdam

Maarten Pieter Schinkel

University of Amsterdam - Department of Economics; Tinbergen Institute

Jan Tuinstra

University of Amsterdam - Department of Quantitative Economics (KE); Tinbergen Institute

Eelko Ubels

University of Amsterdam

Abstract

In Goppelsroeder, Schinkel and Tuinstra (2006) we introduce the Werden-Froeb-index (WFI) to assist in evaluating merger-specific efficiencies in horizontal mergers. The index measures the average reduction in marginal costs required to compensate the anticompetitive effects of the merger and restore pre-merger equilibrium prices and quantities. This companion trial online software calculates the Werden-Froeb-index (WFI) for full mergers between firms that compete on prices (Bertrand competition). Required inputs are (current) sales volumes, unit prices, and the own- and cross-price-elasticities of those commodities involved in the merger. Output is a full report on compensating marginal cost reductions per product, required post-merger marginal costs, and the WFI.

Keywords: Mergers, merger control, efficiency defense, WFI, software

JEL Classification: L100, L400, C430

Suggested Citation

Goppelsroeder, Marie and Schinkel, Maarten Pieter and Tuinstra, Jan and Ubels, Eelko, The Wfi-Calculator. Amsterdam Center for Law & Economics Working Paper No. 2006-11, Available at SSRN: https://ssrn.com/abstract=923864

Marie Goppelsroeder

University of Amsterdam ( email )

Department of Economics (ACLE)
Roetersstraat 11
Amsterdaam, 1018WB
Netherlands
+31-20-525-5052 (Phone)
+31-20-525-5318 (Fax)

Maarten Pieter Schinkel (Contact Author)

University of Amsterdam - Department of Economics ( email )

Roetersstraat 11
1018 WB Amsterdam
Netherlands
+31 20 525 7132 (Phone)
+31 20 525 5318 (Fax)

Tinbergen Institute ( email )

Gustav Mahlerplein 117
Amsterdam, 1082 MS
Netherlands

Jan Tuinstra

University of Amsterdam - Department of Quantitative Economics (KE) ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Eelko Ubels

University of Amsterdam ( email )

Spui 21
Amsterdam, 1018 WB
Netherlands

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