ASYMMETRIC PRICE INCREASE IN CRITICAL LOSS ANALYSIS: SURREPLY TO DALJORD, SØRGARD, AND THOMASSEN

James Langenfeld and Wenqing Li

Journal of Competition Law and Economics, 2014, vol. 10, issue 3, 769-772

Abstract: The criterion for critical loss analysis derived by Øystein Daljord, Lars Sørgard, and Øyvind Thomassen is correct when one uses the Lerner condition to infer actual loss of sales, even though their critical loss formula in the first step of the analysis is incorrect. However, their criterion is not correct in the more general case where one merely estimates actual loss in sales rather than arithmetically deriving actual loss from observed price-cost margin.

JEL-codes: K21 L1 L11 L12 (search for similar items in EconPapers)
Date: 2014
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