Thursday, March 17, 2016

Upward Pricing Pressure of Mergers Weakening Vertical Relationships

Gregor Langus, Charles River Associates (CRA) and Vilen Lipatov, Compass Lexecon Brussels explains Upward Pricing Pressure of Mergers Weakening Vertical Relationships.

ABSTRACT: We modify the UPP test of Farrell and Shapiro (2010) to take into account the possibility that a merger weakens (or eliminates) a vertical supply relationship. After deriving a general effect of the merger, we provide an example of simple estimation strategy when only prices, costs and market shares are available as a snapshot.

https://lawprofessors.typepad.com/antitrustprof_blog/2016/03/upward-pricing-pressure-of-mergers-weakening-vertical-relationships-1.html

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