Friday, February 11, 2011
Posted by D. Daniel Sokol
ABSTRACT: 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 explaini 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.