CMCR-Methods {antitrust} R Documentation

## 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.

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