A NOTE ON UPWARD PRICING PRESSURE: THE POSSIBILITY OF FALSE POSITIVES

A NOTE ON UPWARD PRICING PRESSURE: THE POSSIBILITY OF FALSE POSITIVES

Joseph Farrell and Carl Shapiro proposed a simple test of the possible upward pricing pressure (UPP) following a merger. They showed that the test may give false negatives -- that is, indicate that a merger may not give an UPP, while a more comprehensive test would indicate the opposite. We show tha...

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Veröffentlicht in:Journal of competition law & economics 2012-12, Vol.8 (4), p.881-887
Hauptverfasser: Mathiesen, L., Nilsen, O. A., Sorgard, L.
Format: Artikel
Sprache:eng
Schlagworte:
Acquisitions & mergers
Antitrust
Price increases
Studies
Test methods
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Beschreibung
Zusammenfassung:Joseph Farrell and Carl Shapiro proposed a simple test of the possible upward pricing pressure (UPP) following a merger. They showed that the test may give false negatives -- that is, indicate that a merger may not give an UPP, while a more comprehensive test would indicate the opposite. We show that their test applied to a case with asymmetric firms may give false positives. [PUBLICATION ABSTRACT]
ISSN:1744-6414
1744-6422
DOI:10.1093/joclec/nhs029