Merger simulation in second-score auctions: A nested logit model

Martino De Stefano and Serge Moresi

Economics Letters, 2024, vol. 241, issue C

Abstract: We consider merger simulation based on the second-score auction (SSA) model and the “flat logit” assumption, and extend it to a more general “nested logit” assumption. We apply our framework to the 2012 acquisition of PowerReviews by Bazaarvoice and show that using flat logit instead of nested logit can potentially bias the predicted price effect from the merger substantially.

Keywords: Mergers; Second-score auctions; Nested logit; Simulations (search for similar items in EconPapers)
JEL-codes: D43 D44 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:241:y:2024:i:c:s0165176524002714

DOI: 10.1016/j.econlet.2024.111787

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