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Asymmetric Price Increase In Critical Loss Analysis: Surreply To Daljord, Sørgard, And Thomassen

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Listed:
  • James Langenfeld
  • Wenqing Li

Abstract

The criterion for critical loss analysis derived by Øystein Daljord, Lars Sørgard, and Øyvind Thomassen is correct when one uses the Lerner condition to infer actual loss of sales, even though their critical loss formula in the first step of the analysis is incorrect. However, their criterion is not correct in the more general case where one merely estimates actual loss in sales rather than arithmetically deriving actual loss from observed price-cost margin.

Suggested Citation

  • James Langenfeld & Wenqing Li, 2014. "Asymmetric Price Increase In Critical Loss Analysis: Surreply To Daljord, Sørgard, And Thomassen," Journal of Competition Law and Economics, Oxford University Press, vol. 10(3), pages 769-772.
    • Handle: RePEc:oup:jcomle:v:10:y:2014:i:3:p:769-772.
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    File URL: http://hdl.handle.net/10.1093/joclec/nhu022
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    More about this item

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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