Recapture Ratios in Merger Analysis
Economics Letters, Vol. 170, No. 1, pp. 136-138, 2018
11 Pages Posted: 31 Oct 2017 Last revised: 2 Aug 2018
Date Written: June 11, 2018
Most quantitative tools for assessing competitive effects of mergers rely heavily on recapture ratios (also known as aggregate diversion ratios). Recapture ratios measure the proportion of customers switching away from a product that is captured by other products within the market rather than outside the market. We propose a simple approach for approximating recapture ratios which can be usefully applied in merger and competition cases.
Keywords: Diversion ratios, competitive effects of mergers
JEL Classification: L4
Suggested Citation: Suggested Citation