Recently developed tools are used to predict the effects of differentiated products mergers, but they require the assumption of a particular functional form for industry demand, and any assumption is vulnerable to attack. This paper demonstrates that marginal cost reductions necessary to restore premerger prices can be calculated without making any assumption about demand, and it provides a robust and practical method for determining whether a particular merger enhances consumer welfare.
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Paper provided by U.S. Department of Justice - Antitrust Division in its series Papers with number
96-01.
Length: 5 pages Date of creation: 1996 Date of revision: Handle: RePEc:fth:usjuat:96-01
Contact details of provider: Postal: U.S. DEPARTMENT OF JUSTICE; ANTITRUST DIVISION, JUDICIARY CENTER BUILDING 555 4TH ST. N.W. WASHINGTON D.C. 20001 U.S.A.. Email: Web page: http://www.justice.gov/atr/ More information through EDIRC
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Find related papers by JEL classification: D40 - Microeconomics - - Market Structure and Pricing - - - General D10 - Microeconomics - - Household Behavior - - - General D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
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