PS-methods {antitrust} | R Documentation |
In the following methods, calcProducerSurplus
computes the expected profits of each supplier
with the game depending on the class. The available classes are: Bertrand, Cournot, and Auction2ndCap.
calcProducerSurplusGrimTrigger
is a method that
may be used to explore how a merger affects firms' incentives to collude.
## S4 method for signature 'Bertrand' calcProducerSurplus(object, preMerger = TRUE) ## S4 method for signature 'VertBargBertLogit' calcProducerSurplus(object, preMerger = TRUE) ## S4 method for signature 'Auction2ndCap' calcProducerSurplus(object, preMerger = TRUE, exAnte = TRUE) ## S4 method for signature 'Cournot' calcProducerSurplus(object, preMerger = TRUE) ## S4 method for signature 'Bertrand' calcProducerSurplusGrimTrigger( object, coalition, discount, preMerger = TRUE, isCollusion = FALSE, ... )
object |
An instance of one of the classes listed above. |
preMerger |
If TRUE, returns pre-merger outcome. If FALSE, returns post-merger outcome. Default is TRUE. |
exAnte |
If ‘exAnte’ equals TRUE then the ex ante expected result for each firm is produced, while FALSE produces the expected result conditional on each firm winning the auction. Default is TRUE. |
coalition |
A length c vector of integers indicating the index of the products participating in the coalition. |
discount |
A length k vector of values between 0 and 1 that represent the product-specific discount rate for all products produced by firms particiapting in the coalition. NAs are allowed. |
isCollusion |
TRUE recalculates demand and cost parameters under the assumption that the coalition specified in ‘coalition’ is operating pre-merger. FALSE (the default) uses demand and cost parameters calculated from the ‘ownerPre’ matrix. |
... |
Additional argument to pass to calcPrices (for |
calcProducerSurplusGrimTrigger calculates ‘preMerger’ product producer surplus (as well as other statistics – see below), under the assumption that firms are playing an N-player iterated Prisoner's Dilemma where in each period a coalition of firms decides whether to cooperate with one another by setting the joint surplus maximizing price on some ‘coalition’ of their products, or defect from the coalition by setting all of their products' prices to optimally undercut the prices of the coalition's products. Moreover, firms are assumed to play Grim Trigger strategies where each firm cooperates in the current period so long as every firm in the coalition cooperated last period and defects otherwise. product level ‘discount’ rates are then employed to determine whether a firm's discounted surplus from remaining in the coalition are greater than its surplus from optimally undercutting the coalition prices' for one period plus its discounted surplus when all firms set Nash-Bertrand prices in all subsequent periods.
calcProducerSurplusGrimTrigger
returns a data frame with rows
equal to the number of products produced by any firm participating in
the coalition and the following 5 columns
Discount:The user-supplied discount rate
Coord:Single period producer surplus from coordinating
Defect:Single period producer surplus from defecting
Punish:Single period producer surplus from punishing using Bertrand price
IC:TRUE if the discounted producer surplus from coordinating across all firm products are greater than the surplus from defecting across all firm products for one period and receiving discounted Bertrand surplus for all subsequent periods under Grim Trigger.