Arbeitspapier
The Upward Pricing Pressure Test and the Sensitivity of the Diversion Ratio
The diversion ratio is a key ingredient to the calculation of the Upward Pricing Pressure (UPP) test, which is a new shortcut for screening mergers. It measures the degree of substitutability between the merging goods, which affects the potential for price increase post-merger. There is currently little existing research on how the diversion ratio is to be estimated (unlike its cousin, the cross-price elasticity). This paper explores one of the methods to estimate diversion ratios, which is through the estimation of a demand system. Specifically, this paper shows that the estimated value of the diversion ratio is, in fact, little affected by one of the most contentious decisions in merger analysis: the definition of the market boundary.
- Sprache
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Englisch
- Erschienen in
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Series: Economics Working Paper Series ; No. 2014/08
- Klassifikation
-
Wirtschaft
- Thema
-
Upward pricing pressure
mergers
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Cheung, Lydia
- Ereignis
-
Veröffentlichung
- (wer)
-
Auckland University of Technology (AUT), Faculty of Business, Economics and Law
- (wo)
-
Auckland
- (wann)
-
2014
- Handle
- Letzte Aktualisierung
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10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Cheung, Lydia
- Auckland University of Technology (AUT), Faculty of Business, Economics and Law
Entstanden
- 2014
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