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Upward Pricing Pressure of Mergers Weakening Vertical Relationships

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  • Gregor Langus
  • Vilen Lipatov

Abstract

We modify the UPP test of Farrell and Shapiro (2010) to take into account the possibility that a merger weakens (or eliminates) a vertical supply relationship. After deriving a general effect of the merger, we provide an example of simple estimation strategy when only prices, costs and market shares are available as a snapshot.

Suggested Citation

  • Gregor Langus & Vilen Lipatov, 2015. "Upward Pricing Pressure of Mergers Weakening Vertical Relationships," CESifo Working Paper Series 5692, CESifo.
    • Handle: RePEc:ces:ceswps:_5692
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp5692.pdf
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    References listed on IDEAS

    as
    1. Farrell Joseph & Shapiro Carl, 2010. "Antitrust Evaluation of Horizontal Mergers: An Economic Alternative to Market Definition," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-41, March.
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    More about this item

    Keywords

    UPP; supply relationship; merger effects;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L49 - Industrial Organization - - Antitrust Issues and Policies - - - Other

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