Simulating Vertical Mergers and the Vertical GUPPI Approach

Gleb B. Domnenko, D. Sibley
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引用次数: 13

Abstract

Moresi and Salop (2013) have extended the “upward pricing pressure” approach used in analyzing horizontal mergers to the analysis of vertical mergers. They present test expressions called the vGUPPIu and vGUPPId to see if the upstream and downstream prices will rise as a result of the merger. This approach has gained acceptance.

In this paper we present the results of Monte Carlo simulations of a vertical merger for a simple setup with one upstream monopolist and two downstream firms. In the simulations, the upstream price paid by the remaining downstream rival can either rise or fall. The downstream price always falls. The downstream rival may exit even when the upstream price falls.

Based on these simulations, we see if the Moresi and Salop formulas predict the directions of price changes correctly. We also derive a variation on the Moresi and Salop formulation, arriving at different vGUPPI formulas. Overall, neither approach does well. Both versions of the vGUPPIu predict upstream price increases, whereas the simulations show many decreases. The merged firm’s downstream price always falls in the simulations. The Moresi and Salop downstream price test is correct 82.1% of the time, whereas the variant is correct 100% of the time.
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模拟垂直合并和垂直GUPPI方法
Moresi和Salop(2013)将分析横向并购的“上行定价压力”方法扩展到分析纵向并购。他们提出了名为vGUPPIu和vGUPPId的测试表达式,以查看上游和下游价格是否会因合并而上涨。这种方法已被接受。在本文中,我们提出了蒙特卡罗模拟垂直合并的结果,一个简单的设置有一个上游垄断者和两个下游公司。在模拟中,剩余的下游竞争对手支付的上游价格可以上升也可以下降。下游价格总是下跌。即使上游价格下跌,下游竞争对手也可能退出。基于这些模拟,我们可以看到Moresi和Salop公式是否正确地预测了价格变化的方向。我们还推导了Moresi和Salop公式的变体,得出了不同的vGUPPI公式。总的来说,这两种方法都不是很好。两个版本的vGUPPIu都预测上游价格会上涨,而模拟结果显示价格会大幅下降。在模拟中,合并后公司的下游价格总是下降的。Moresi和Salop下游价格测试的正确率为82.1%,而变体的正确率为100%。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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