Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/202411
Authors: 
Miller, Nathan
Remer, Marc
Ryan, Conor
Sheu, Gloria
Year of Publication: 
2016
Series/Report no.: 
EAG Discussion Paper 16-2
Abstract: 
We use Monte Carlo experiments to evaluate whether "upward pricing pressure" (UPP) accurately predicts the price effects of mergers, motivated by the observation that UPP is a restricted form of the first order approximation derived in Jaffe and Weyl (2013). Results indicate that UPP is quite accurate with standard log-concave demand systems, but understates price effects if demand exhibits greater convexity. Prediction error does not systematically exceed that of misspecifed simulation models, nor is it much greater than that of correctly-specifed models simulated with imprecise demand elasticities. The results also support that both UPP and the HHI change provide accurate screens for anticompetitive mergers.
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.