Using data from the US automobile market, we empirically examine the link between competition and innovation. Consistent with a large literature, we use patent counts as a measure of innovation. The combination of the US market's economic importance, market dynamics, and the significant...

A common approach to merger simulations used in antitrust cases is to calibrate demand from market shares and a few additional parameters. When the products involved in the merger case are differentiated along several dimensions, the resulting diversion ratios may be very different from those...

In this article, I employ a linear differentiated demand model to demonstrate the risks associated with using market shares as a proxy for diversion ratios when calculating the unilateral effects of a merger. In particular, when pro-rata market shares are not adjusted for recapture rates, the...