10 Pages Posted: 4 Jan 2011
Date Written: January 2, 2011
Joseph Farrell and Carl Shapiro have proposed a measure of Upward Pricing Pressure (UPP) as offering a presumption of anticompetitive unilteral effects in a merger. We explain that the underlying framework (which relies on Bertrand competition) is in fact a special case of a more general merger simulation methodology. We discuss the strengths and weaknesses of the framework as a policy tool.
Keywords: merger analysis, unilateral effects
JEL Classification: L40, L10
Suggested Citation: Suggested Citation