PriceDelta-Methods {antitrust}

Methods For Calculating Price Delta

Description

For Antitrust, the method computes equilibrium price changes due to a merger assuming that firms are playing a Nash-Bertrand or Cournot game. This is a wrapper method for computing the difference between pre- and post-merger equilbrium prices.

For AIDS, the method computes equilibrium price changes due to a merger assuming that firms are playing a Nash-Bertrand or Cournot game and LA-AIDS. This method calls a non-linear equations solver to find a sequence of price changes that satisfy the Bertrand FOCs.

Usage

## S4 method for signature 'Antitrust'
calcPriceDelta(
  object,
  levels = FALSE,
  market = FALSE,
  index = c("paasche", "laspeyres"),
  ...
)

## S4 method for signature 'Cournot'
calcPriceDelta(object, levels = FALSE, market = TRUE, ...)

## S4 method for signature 'VertBargBertLogit'
calcPriceDelta(object, levels = FALSE, market = FALSE, ...)

## S4 method for signature 'AIDS'
calcPriceDelta(
  object,
  isMax = FALSE,
  levels = FALSE,
  subset,
  market = FALSE,
  index = c("paasche", "laspeyres"),
  ...
)

## S4 method for signature 'Auction2ndLogit'
calcPriceDelta(
  object,
  levels = TRUE,
  market = FALSE,
  exAnte = ifelse(market, TRUE, FALSE),
  ...
)

Arguments

object

An instance of one of the classes listed above.

levels

If TRUE, report results in levels. If FALSE, report results in percents. Default is FALSE.

market

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

index

If "paasche",calculates market-wide price changes using post-merger predicted shares. If "laspeyres", calculates price index using pre-merger shares. Default is "paasche".

...

Additional values that may be used to change the default values of the non-linear equation solver.

isMax

If TRUE, uses numerical derivatives to determine if equilibrium price vector is a local maximum. Default is FALSE.

subset

A vector of length k where each element equals TRUE if the product indexed by that element should be included in the post-merger simulation and FALSE if it should be excluded.Default is a length k vector of 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 FALSE, unless ‘market’ is TRUE.