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A Note on Upward Pricing Pressure:The possibility of false positives


  • Mathiesen, Lars

    () (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Nilsen, Øivind Anti

    () (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Sørgard, Lars

    () (Dept. of Economics, Norwegian School of Economics and Business Administration)


Farrell and Shapiro proposed a simple test of the possible upward pricing pressure (UPP) following a merger. They showed that the test may give false negatives, that is, indicate that a merger may not give an UPP, while a more comprehensive test would indicate the opposite. We show that their test applied to a case with asymmetric firms may give false positives.

Suggested Citation

  • Mathiesen, Lars & Nilsen, Øivind Anti & Sørgard, Lars, 2012. "A Note on Upward Pricing Pressure:The possibility of false positives," Discussion Paper Series in Economics 11/2012, Norwegian School of Economics, Department of Economics.
  • Handle: RePEc:hhs:nhheco:2012_011

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    Cited by:

    1. Brijesh P. Pinto & David S. Sibley, 2016. "Unilateral Effects with Endogenous Quality," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 49(3), pages 449-464, November.
    2. Andreea Cosnita-Langlais & Bjørn Olav Johansen & Lars Sorgard, 2018. "Upward Price Pressure in Two-Sided Markets: Incorporating Feedback Effects," EconomiX Working Papers 2018-3, University of Paris Nanterre, EconomiX.
    3. repec:spr:epolin:v:44:y:2017:i:3:d:10.1007_s40812-016-0053-6 is not listed on IDEAS

    More about this item


    Unilateral merger effects; post-merger price effects.;

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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