Quantitative Techniques for Competition and Antitrust Analysis by Peter Davis and Eliana Garcés 13 pot

... result from a brand’s image. Suppose we face a market with two differentiated goods and the following linear demand system: Demand for good 1: q 1 D a 1  b 11 p 1 C b 12 p 2 ; Demand for good 2: ... a firm does not matter for the value of the firm. Of course, most practitioners and academics believed and believe that the proportions of debt and equity do matter and so for fift...

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... in Fisher (1980, 1986) and Finkelstein and Levenbach (1983). For more general econometrics texts, see, for example, Greene (2007) and Wooldridge (2007). And for an advanced and more technical but ... “reduced-form” equations. Estimating a reduced form for market prices and quantities will require data on equilibrium prices and quantities in that market as dependent varia...

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... questions and the more usual experience is to iterate back and forth between them. On the other hand, in the context of antitrust investigations, the question and laboratory may be very well defined. For ... caused by movement in costs (which is in addition to any variation in prices explained by movements in the demand curve caused by the exogenous demand shifting variables X...

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... produced by a different firm which respectively maximize 12 For a critique of the use of price correlation analysis, see, for example, Werden and Froeb (1993a). A response is provided by Sherwin ... would be for liquid egg, but the set of potential competitors may involve liquid egg and (formerly) smoothie producers. Finally, we note that the responses by rivals can be to ente...

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... information about demand and in particular the own-price elastic- 40 This section draws on Harris and Simons (1989) and also the working papers by O’Brien and Wickelgren (2003) and by Katz and ... demand curve. First, following Landes and Posner (1981) and Scheffman and Spiller (1987) consider the dominant-firm model. In that model, the dominant firm faced a mar- ket deman...

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... to allow for firm heterogeneity and Mazzeo (2002) and Seim (2006) extended the analysis and estimation of entrygames to allow for product differentiation. Davis (2006c) allowed for some forms of ... jurisdictions. 4 See, for example, the work by Sutton (1991), Klepper (1996), and Klepper and Simons (2000), and in the strategy literature see Markides and Geroski (200...

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... firm and market demand for understanding competition. For example, we have seen that demand is important in determining firm behavior such as pricing decisions and we have also seen that demand ... outside options, and imperfect monitoring. In the theoretical litera- ture, these issues have been tackled, for example, by Green and Porter (1984) and Rotemberg and Saloner (198...

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... segment demand is 2:6 for premium beer, 2:7 for popular beer, and 2:4 for light beer. These price elasticities could be used as important evidence toward a formal test of the hypothesis that ... alternative functional form. For example, Berry et al. (1995) believe that the demand for a type of car will depend on a consumer’s level of income and work with the natural logarithm...

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... 519 10.2.1 Informal and Semiformal Analysis of Incentives Informal quantitative analysis can sometimes be insightful for evaluating the incen- tive for foreclosure. An example of such an analysis ... strategies in the rest of this chapter. Before doing so we briefly discuss informal and semiformal quantitative methods for evaluating the incentive for foreclosure. 10.2. Me...

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... small. For Lara, Adrian, and Tristan For Sara This page intentionally left blank Quantitative Techniques for Competition and Antitrust Analysis 8 1. The Determinants of Market Outcomes Demand at ... since understanding these key elements of economic analysis is crucial for an appropriate use of quantitative techniques. 1.1 Demand Functions and Demand Elasticities...

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