Diversion-Methods {antitrust} | R Documentation |

Calculate the diversion matrix between any two products in the market.

## S4 method for signature 'Bertrand' diversion(object, preMerger = TRUE, revenue = FALSE) ## S4 method for signature 'AIDS' diversion(object, preMerger = TRUE, revenue = TRUE) ## S4 method for signature 'VertBargBertLogit' diversion(object, preMerger = TRUE, revenue = TRUE)

`object` |
An instance of one of the classes listed above. |

`preMerger` |
If TRUE, calculates pre-merger price elasticities. If FALSE, calculates post-merger price elasticities. Default is TRUE. |

`revenue` |
If TRUE, calculates revenue diversion. If FALSE, calculates quantity diversion. Default is TRUE for ‘Bertrand’ and FALSE for ‘AIDS’. |

For Bertrand, when ‘revenue’ is FALSE (the default),
this method uses the results from the merger calibration and
simulation to compute the *quantity* diversion matrix between any two products
in the market. Element i,j of this matrix is the quantity diversion from
product i to product j, or the
proportion of product i's sales that leave (go to) i for (from) j due
to a increase (decrease) in i's price. Mathematically, quantity diversion is
*\frac{-ε_{ji}share_j}{ε_{ii}share_i}*,
where *ε_{ij}* is the cross-price elasticity from i to j.

When ‘revenue’ is TRUE, this method computes the revenue diversion
matrix between any two products in the market. Element i,j of this matrix is the revenue diversion from
product i to product j, or the
proportion of product i's revenues that leave (go to) i for (from) j due
to a increase (decrease) in i's price. Mathematically, revenue diversion is
*-\frac{ε_{ji}(ε_{jj}-1)r_j}{ε_{jj}(ε_{ii}-1)r_j}*
where *r_i* is the revenue share of product i.

When ‘preMerger’ is TRUE, diversions are calculated at pre-merger equilibrium prices, and when ‘preMerger’ is FALSE, they are calculated at post-merger equilibrium prices.

For AIDS, when ‘revenue’ is TRUE (the default),
this method computes the *revenue* diversion matrix between any two
products in the market. For AIDS, the revenue diversion from i to j is
*\frac{β_{ji}}{β_ij}*, where *β_{ij}* is the
percentage change in product i's revenue due to a change in j's price.

When ‘revenue’ is FALSE, this `callNextMethod`

is invoked. Will
yield a matrix of NAs if the user did not supply prices.

When ‘preMerger’ is TRUE, diversions are calculated at pre-merger equilibrium prices, and when ‘preMerger’ is FALSE, they are calculated at post-merger equilibrium prices.

returns a k x k matrix of diversion ratios, where the i,jth element is the diversion from i to j.

[Package *antitrust* version 0.99.25 Index]