Upward Pricing Pressure of Mergers Weakening Vertical Relationships

Gregor Langus and Vilen Lipatov

No 5692, CESifo Working Paper Series from CESifo

Abstract: We modify the UPP test of Farrell and Shapiro (2010) to take into account the possibility that a merger weakens (or eliminates) a vertical supply relationship. After deriving a general effect of the merger, we provide an example of simple estimation strategy when only prices, costs and market shares are available as a snapshot.

Keywords: UPP; supply relationship; merger effects (search for similar items in EconPapers)
JEL-codes: K21 L49 (search for similar items in EconPapers)
Date: 2015
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