IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v241y2024ics0165176524002714.html
   My bibliography  Save this article

Merger simulation in second-score auctions: A nested logit model

Author

Listed:
  • De Stefano, Martino
  • Moresi, Serge

Abstract

We consider merger simulation based on the second-score auction (SSA) model and the “flat logit” assumption, and extend it to a more general “nested logit” assumption. We apply our framework to the 2012 acquisition of PowerReviews by Bazaarvoice and show that using flat logit instead of nested logit can potentially bias the predicted price effect from the merger substantially.

Suggested Citation

  • De Stefano, Martino & Moresi, Serge, 2024. "Merger simulation in second-score auctions: A nested logit model," Economics Letters, Elsevier, vol. 241(C).
    • Handle: RePEc:eee:ecolet:v:241:y:2024:i:c:s0165176524002714
    DOI: 10.1016/j.econlet.2024.111787
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0165176524002714
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2024.111787?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yeon-Koo Che, 1993. "Design Competition through Multidimensional Auctions," RAND Journal of Economics, The RAND Corporation, vol. 24(4), pages 668-680, Winter.
    2. Miller, Nathan H., 2014. "Modeling the effects of mergers in procurement," International Journal of Industrial Organization, Elsevier, vol. 37(C), pages 201-208.
    3. Panhans, Matthew T. & Taragin, Charles, 2023. "Consequences of model choice in predicting horizontal merger effects," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bogetoft, Peter & Nielsen, Kurt, 2003. "Yardstick Based Procurement Design In Natural Resource Management," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25910, International Association of Agricultural Economists.
    2. Gajanan Panchal & Vipul Jain & Naoufel Cheikhrouhou & Matthias Gurtner, 2017. "Equilibrium analysis in multi-echelon supply chain with multi-dimensional utilities of inertial players," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(4), pages 417-436, August.
    3. Stoll, Sebastian & Zöttl, Gregor, 2012. "Information Disclosure in Dynamic Buyer-Determined Procurement Auctions: An Empirical Study," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62044, Verein für Socialpolitik / German Economic Association.
    4. Lange, Andreas & Ross, Johannes, 2024. "Internalizing match-dependent externalities," Journal of Economic Behavior & Organization, Elsevier, vol. 218(C), pages 356-378.
    5. Albano, Gian Luigi & Cipollone, Angela & Paolo, Roberto Di & Ponti, Giovanni & Sparro, Marco, 2024. "Scoring rules in experimental procurement," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 108(C).
    6. David C. Parkes & Jayant Kalagnanam, 2005. "Models for Iterative Multiattribute Procurement Auctions," Management Science, INFORMS, vol. 51(3), pages 435-451, March.
    7. Asker, John, 2008. "Subsidizing (and taxing) business procurement," Journal of Public Economics, Elsevier, vol. 92(7), pages 1629-1643, July.
    8. Chen Liang & Yili Hong & Pei-Yu Chen & Benjamin B. M. Shao, 2022. "The Screening Role of Design Parameters for Service Procurement Auctions in Online Service Outsourcing Platforms," Information Systems Research, INFORMS, vol. 33(4), pages 1324-1343, December.
    9. Brosig, Jeannette & Heinrich, Timo, 2011. "Reputation and Mechanism Choice in Procurement Auctions – An Experiment," Ruhr Economic Papers 254, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    10. Zhang, Meng & Kong, Zhaojun, 2022. "A multi-attribute double auction and bargaining model for emergency material procurement," International Journal of Production Economics, Elsevier, vol. 254(C).
    11. Jens Leth Hougaard & Kurt Nielsen & Athanasios Papakonstantinou, 2012. "A Simple Multi-attribute Yardstick Auction Without Prior Scoring," MSAP Working Paper Series 02_2012, University of Copenhagen, Department of Food and Resource Economics.
    12. Author-Name: Luca Di Corato & Cesare Dosi & Michele Moretto, 2014. "Bidding for Conservation Contracts," Working Papers 2014.65, Fondazione Eni Enrico Mattei.
    13. Amaral, Miguel & Saussier, Stéphane & Yvrande-Billon, Anne, 2009. "Auction procedures and competition in public services: The case of urban public transport in France and London," Utilities Policy, Elsevier, vol. 17(2), pages 166-175, June.
    14. Charles J. Thomas & Bart J. Wilson, 2014. "Horizontal Product Differentiation in Auctions and Multilateral Negotiations," Economica, London School of Economics and Political Science, vol. 81(324), pages 768-787, October.
    15. Celentani, Marco & Ganuza, Juan-Jose, 2002. "Corruption and competition in procurement," European Economic Review, Elsevier, vol. 46(7), pages 1273-1303, July.
    16. Di Corato, Luca & Dosi, Cesare & Moretto, Michele, 2015. "Multidimensional auctions for long-term procurement contracts under the threat of early exit: the case of conservation auctions," Working Paper Series 2015:6, Swedish University of Agricultural Sciences, Department Economics.
    17. Peter Postl, 2013. "Efficiency versus optimality in procurement," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 53(2), pages 425-472, June.
    18. Papakonstantinou, A. & Bogetoft, P., 2013. "Crowd-sourcing with uncertain quality - an auction approach," MPRA Paper 44236, University Library of Munich, Germany.
    19. Patrick GIANFALDONI & Pierre-Henri MORAND, 2015. "Incentives, Procurement and Regulation of Work Integration Social Enterprises in France: Old Ideas for New Firms?," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 86(2), pages 199-219, June.
    20. Pham, Long & Teich, Jeffrey & Wallenius, Hannele & Wallenius, Jyrki, 2015. "Multi-attribute online reverse auctions: Recent research trends," European Journal of Operational Research, Elsevier, vol. 242(1), pages 1-9.

    More about this item

    Keywords

    Mergers; Second-score auctions; Nested logit; Simulations;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:241:y:2024:i:c:s0165176524002714. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.