• norsk
    • English
  • English 
    • norsk
    • English
  • Login
View Item 
  •   Home
  • Norges Handelshøyskole
  • Department of Economics
  • Discussion papers (SAM)
  • View Item
  •   Home
  • Norges Handelshøyskole
  • Department of Economics
  • Discussion papers (SAM)
  • View Item
JavaScript is disabled for your browser. Some features of this site may not work without it.

Merger simulations with observed diversion ratios

Mathiesen, Lars; Nilsen, Øivind Anti; Sørgard, Lars
Working paper
Thumbnail
View/Open
dp2010-27.pdf (418.2Kb)
URI
http://hdl.handle.net/11250/163328
Date
2010-10
Metadata
Show full item record
Collections
  • Discussion papers (SAM) [638]
Abstract
A common approach to merger simulations used in antitrust cases is to calibrate demand

from market shares and a few additional parameters. When the products involved in the

merger case are differentiated along several dimensions, the resulting diversion ratios may

be very different from those based upon market shares. This again may affect the predicted

post-merger price effects. This article shows how merger simulation can be improved by

using observed diversion ratios. To illustrate the effects of this approach we use diversion

ratios from a local grocery market in Norway. In this case diversions from the acquired to

the acquiring stores were considerably smaller than suggested by market shares, and the

predicted average price increase from the acquisition was 40 % lower using this model

rather than a model based upon market shares. This analysis also suggests that even a subset

of observed diversion ratios may significantly change the prediction from a merger

simulation based upon market shares.
Publisher
Norwegian School of Economics and Business Administration. Department of Economics
Series
Discussion paper
2010:27

Contact Us | Send Feedback

Privacy policy
DSpace software copyright © 2002-2019  DuraSpace

Service from  Unit
 

 

Browse

ArchiveCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsDocument TypesJournalsThis CollectionBy Issue DateAuthorsTitlesSubjectsDocument TypesJournals

My Account

Login

Statistics

View Usage Statistics

Contact Us | Send Feedback

Privacy policy
DSpace software copyright © 2002-2019  DuraSpace

Service from  Unit