CMCR-Methods {antitrust}

Methods For Calculating Compensating Marginal Cost Reductions

Description

Calculate the marginal cost reductions necessary to restore premerger prices in a merger, or the Upwards Pricing Pressure Index for the products of merging firms playing a differentiated products Bertrand pricing game.

Usage

## S4 method for signature 'Bertrand'
cmcr(object, market = FALSE, levels = FALSE, rel = c("cost", "price"))

## S4 method for signature 'Cournot'
cmcr(object, market = TRUE, levels = FALSE, rel = c("cost", "price"))

## S4 method for signature 'AIDS'
cmcr(object, market = FALSE, rel = c("cost", "price"))

## S4 method for signature 'Auction2ndLogit'
cmcr(object, market = FALSE, levels = FALSE, rel = c("cost", "price"), ...)

Arguments

object

An instance of one of the classes listed above.

market

If TRUE, calculates (post-merger) share-weighted average of metric. Default is FALSE.

levels

If TRUE calculates CMCR in levels rather than as a percentage of pre-merger costs. Default is FALSE.

rel

A length 1 character vector indicating whether CMCR should be calculated relative to pre-merger cost (“cost”) or pre-merger price (“price”), Default is “cost”. Ignored when levels is TRUE.

...

Additional arguments to pass to cmcr.

Details

cmcr uses the results from the merger simulation and calibration methods associates with a particular class to compute the compensating marginal cost reduction (CMCR) for each of the merging parties' products.

Value

cmcr returns a vector of length k equal to CMCR for the merging parties' products and 0 for all other products.

See Also

cmcr.bertrand is a function that calculates CMCR without the need to first calibrate a demand system and simulate a merger.