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Understanding UPP

Author

Listed:
  • Epstein Roy J.

    (Boston College, rje@royepstein.com)

  • Rubinfeld Daniel L

    (University of California, Berkeley, Law School, drubinfeld@law.berkeley.edu)

Abstract

Joseph Farrell and Carl Shapiro have proposed a measure of Upward Pricing Pressure (UPP) as offering a presumption of anticompetitive unilateral effects in a merger. We explain that the underlying framework (which relies on Bertrand competition) is in fact a special case of a more general merger simulation methodology. We discuss the strengths and weaknesses of the framework as a policy tool.

Suggested Citation

  • Epstein Roy J. & Rubinfeld Daniel L, 2010. "Understanding UPP," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 10(1), pages 1-12, May.
    • Handle: RePEc:bpj:bejtec:v:10:y:2010:i:1:n:21
    DOI: 10.2202/1935-1704.1641
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    References listed on IDEAS

    as
    1. Werden, Gregory J, 1996. "A Robust Test for Consumer Welfare Enhancing Mergers among Sellers of Differentiated Products," Journal of Industrial Economics, Wiley Blackwell, vol. 44(4), pages 409-413, December.
    2. Roy J. Epstein & Daniel L. Rubinfeld, 2002. "Merger Simulation: A Simplified Approach with New Applications," Industrial Organization 0201002, University Library of Munich, Germany.
    3. 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.
    4. Epstein Roy J. & Rubinfeld Daniel L., 2004. "Merger Simulation with Brand-Level Margin Data: Extending PCAIDS with Nests," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 4(1), pages 1-28, March.
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