The 2010 Merger Guidelines define an improved road-map for merger analysis. Evidence is elevated to a position of prominence in Section II of the revised draft, although we note that the presentation lacks the necessary context. Economic theory now plays a larger role in the analysis, a change...

Critical Loss Analysis is an empirical implementation of the hypothetical monopolist test for market definition contained in the Department of Justice and Federal Trade Commission Horizontal Merger Guidelines. As such, it compares the breakeven Critical Loss with a prediction of the Actual Loss...

Farrell and Shapiro’s Upward Pressure on Price (UPP) framework is an innovative and elegant technique designed to evaluate mergers in differentiated product markets. The authors advance their approach primarily as a screen for unilateral effects cases, although others suggest that UPP might be...

Critical Loss analysis is an empirical implementation of the hypothetical monopolist test for market definition contained in the Department of Justice and Federal Trade Commission Horizontal Merger Guidelines. As usually applied, the test accepts the proposed market definition as relevant for...

Market definition, a concept that has long served to structure competitive analysis, is under assault from theoreticians who object to the inability of the standard analysis to define a market compatible with their models of unilateral effects. Although these unilateral models have not been...

In a recent paper, Gregory Werden and Luke Froeb present a general discussion of unilateral effects analysis with a particular focus on factors that limit the applicability of the Upward Pressure on Price (UPP) model. In one of our earlier papers, we had provided simple simulations showing that...

Critical Loss Analysis is an empirical implementation of the hypothetical monopolist test for market definition contained in the Department of Justice and Federal Trade Commission Horizontal Merger Guidelines. As usually applied, the test accepts the proposed market definition as relevant for...

In their response to our paper “Critical Loss vs. Diversion Analysis: Clearing up the Confusion,” Farrell and Shapiro provide a graphical illustration of our Retention Ratio adjustment to their suggested revision of critical loss analysis. In this rejoinder, we suggest that competition among...