Owners of standard essential patents (SEPs) are cast as villains for engaging in “patent hold-up,” i.e., taking advantage of the fact that they negotiate royalties with implementer-licensees that already have made sunk investments in the standard. In contrast to “patent ambush,” patent...

We investigate the relationship between the price effects of mergers in Bertrand oligopoly and the rates at which merger synergies are passed through to consumers in the form of lower prices. Our main conclusion is that pass-through rates and price effects are closely related. In particular,...

Public policy toward innovation faces a trade-off: Increasing the compensation of successful inventors increases dynamic efficiency by spurring technological progress, but it decreases static efficiency by enlarging a wedge between price and marginal cost. In making this trade-off, public policy...

This paper explains how basic microeconomics can be used to assess lost profits from patent infringement. The main suggested analysis is an adaptation of merger simulation. Observed prices and quantities are combined with estimated demand parameters to calibrate a model of the industry with...

This paper explains how basic microeconomics can be used to assess lost profits from patent infringement. The main suggested analysis is an adaptation of merger simulation. Observed prices and quantities are combined with estimated demand parameters to calibrate a model of the industry with...

In the competitive analysis of mergers, "calibrated economic models" are standard, formal models, particularly monopoly and oligopoly models, in which the values of the key parameters are set on the basis of observable features of the industry under review. Calibrated economic models offer three...

This chapter first reviews the economic theory underlying the unilateral competitive effects of mergers, focusing on the Cournot model, commonly applied to homogeneous products; the Bertrand model, commonly applied to differentiated consumer products; and models of auctions and bargaining,...

The downstream effects of mergers between manufacturers of differentiated consumer products are partly determined by the relationship between the merging manufacturers and retailers. That relationship may be such that the retail price effects of the merger are exactly those if the manufacturers...