2011-05-01
Challenges in merger simulation analysis
Publication
Publication
The American Economic Review , Volume 101 - Issue 3 p. 56- 59
In this paper, we share our experience with merger simulations using a Random Coefficient Logit model on the demand side and assuming a static Bertrand game on the supply side. Drawing largely from our work in Knittel and Metaxoglou (2008), we show that different demand estimates obtained from different combinations of optimization algorithms and starting values lead to substantial differences in post-merger market outcomes using metrics such as industry profits, and change in consumer welfare and prices.
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| doi.org/10.1257/aer.101.3.56 | |
| The American Economic Review | |
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Knittel, C.R. (Christopher R.), & Metaxoglou, K. (2011). Challenges in merger simulation analysis. In The American Economic Review (Vol. 101, pp. 56–59). doi:10.1257/aer.101.3.56
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