Challenges in Merger Simulation Analysis
In this paper, we share our experience with merger simulations using a Random Coefficient Logit model on the demand side and assuming a static Bertrand game on the supply side. Drawing largely from our work in Knittel and Metaxoglou (2008), we show that different demand estimates obtained from diffe...
| Main Authors: | , |
|---|---|
| Other Authors: | |
| Format: | Article |
| Language: | en_US |
| Published: |
American Economic Association
2012
|
| Online Access: | http://hdl.handle.net/1721.1/75109 https://orcid.org/0000-0002-7654-8641 |
| _version_ | 1811073621232189440 |
|---|---|
| author | Knittel, Christopher Roland Metaxoglou, Konstantinos |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Knittel, Christopher Roland Metaxoglou, Konstantinos |
| author_sort | Knittel, Christopher Roland |
| collection | MIT |
| description | In this paper, we share our experience with merger simulations using a Random Coefficient Logit model on the demand side and assuming a static Bertrand game on the supply side. Drawing largely from our work in Knittel and Metaxoglou (2008), we show that different demand estimates obtained from different combinations of optimization algorithms and starting values lead to substantial differences in post-merger market outcomes using metrics such as industry profits, and change in consumer welfare and prices. |
| first_indexed | 2024-09-23T09:35:53Z |
| format | Article |
| id | mit-1721.1/75109 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T09:35:53Z |
| publishDate | 2012 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | mit-1721.1/751092022-09-30T15:32:30Z Challenges in Merger Simulation Analysis Knittel, Christopher Roland Metaxoglou, Konstantinos Sloan School of Management Knittel, Christopher Roland In this paper, we share our experience with merger simulations using a Random Coefficient Logit model on the demand side and assuming a static Bertrand game on the supply side. Drawing largely from our work in Knittel and Metaxoglou (2008), we show that different demand estimates obtained from different combinations of optimization algorithms and starting values lead to substantial differences in post-merger market outcomes using metrics such as industry profits, and change in consumer welfare and prices. 2012-11-29T20:21:23Z 2012-11-29T20:21:23Z 2011-05 Article http://purl.org/eprint/type/JournalArticle 0002-8282 1944-7981 http://hdl.handle.net/1721.1/75109 Knittel, Christopher R., and Konstantinos Metaxoglou. “Challenges in Merger Simulation Analysis.” American Economic Review 101.3 (2011): 56–59. Web. https://orcid.org/0000-0002-7654-8641 en_US http://dx.doi.org/10.1257/aer.101.3.56 American Economic Review Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf American Economic Association |
| spellingShingle | Knittel, Christopher Roland Metaxoglou, Konstantinos Challenges in Merger Simulation Analysis |
| title | Challenges in Merger Simulation Analysis |
| title_full | Challenges in Merger Simulation Analysis |
| title_fullStr | Challenges in Merger Simulation Analysis |
| title_full_unstemmed | Challenges in Merger Simulation Analysis |
| title_short | Challenges in Merger Simulation Analysis |
| title_sort | challenges in merger simulation analysis |
| url | http://hdl.handle.net/1721.1/75109 https://orcid.org/0000-0002-7654-8641 |
| work_keys_str_mv | AT knittelchristopherroland challengesinmergersimulationanalysis AT metaxogloukonstantinos challengesinmergersimulationanalysis |