Download This Paper Open PDF in Browser

Recapture Ratios in Merger Analysis

20 Pages Posted: 31 Oct 2017  

Serge Moresi

Charles River Associates (CRA)

Hans Zenger

Charles River Associates (CRA)

Date Written: October 29, 2017

Abstract

Most quantitative tools for assessing potential competitive effects of mergers (e.g., upward pricing pressure indices and merger simulation models) rely heavily on recapture ratios. We show how recapture ratios can be approximated using simple microeconomic relationships and commonly-used parameters — namely, the products’ sales, profit margins, and group elasticity of demand. We illustrate our approach for both horizontal and vertical product differentiation.

Keywords: Recapture Ratios, Aggregate Diversion Ratios, Competitive Effects of Mergers

JEL Classification: L4

Suggested Citation

Moresi, Serge and Zenger, Hans, Recapture Ratios in Merger Analysis (October 29, 2017). Available at SSRN: https://ssrn.com/abstract=3061622

Serge Moresi (Contact Author)

Charles River Associates (CRA) ( email )

1201 F Street, NW
Suite 700
Washington, DC 20004
United States
(202)662-3847 (Phone)

Hans Zenger

Charles River Associates (CRA) ( email )

Avenue Louise 81
Brussels, 1050
Belgium

HOME PAGE: http://works.bepress.com/hans_zenger/

Paper statistics

Downloads
67
rank
298,013
Abstract Views
187
PlumX