A note on upward pricing pressure: the possibility of false positives
Journal article, Peer reviewed
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Original versionJournal of Competition Law & Economics 2012, 8(4):881-887 doi:10.1093/joclec/nhs029
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.
-This is the author's version of the article:"A Note on Upward Pricing Pressure: The possibility of false positives" Journal of Competition Law and Economics, Volume 8, Issue 4 Pp. 881-887.