The “AIDS” class contains all the information needed to calibrate a AIDS demand system and perform a merger analysis under the assumption that firms are playing a differentiated products Bertrand pricing game.
Objects can be created by using the constructor function
Let k denote the number of products produced by all firms.
A negative number equal to the industry pre-merger price elasticity.
A length k vector who elements equal to an initial guess of the proportional change in prices caused by the merger.
A length k vector containing the simulated price effects from the merger.
Bertrand, by class “Linear”, distance 2.
For all of methods containing the ‘preMerger’ argument, ‘preMerger’ takes on a value of TRUE or FALSE, where TRUE invokes the method using the pre-merger ownership structure, while FALSE invokes the method using the post-merger ownership structure.
Calculates pre-merger or post-merger equilibrium margins.
Computes the proportional change in each products' price from the
merger under the assumptions that consumer demand is AIDS and firms play a differentiated product
Bertrand Nash pricing game.When isMax equals TRUE, a check is run
to determine if the calculated equilibrium price vector locally maximizes
profits. ‘...’ may be used to change the
default values of
BBsolve, the non-linear equation solver.
Compute either pre-merger or post-merger equilibrium prices under the assumptions that consumer demand is AIDS and firms play a differentiated product Bertrand Nash pricing game. return a vector of length-k vector of NAs if user did not supply prices.
Calculates the price changes that a Hypothetical Monopolist would impose on its products relative to pre-merger prices.
Computes either pre-merger or post-merger equilibrium quantity shares under the assumptions that consumer demand is AIDS and firms play a differentiated product Bertrand Nash pricing game.
Uncover AIDS demand parameters. Assumes that firms are currently at equilibrium in a differentiated product Bertrand Nash pricing game.
Calculates compensated marginal cost reduction, the percentage decrease in the marginal costs of the merging parties' products needed to offset a post-merger price increase.
Calculate the amount of money a representative consumer would need to be paid to be just as well off as they were before the merger. Requires a length-k vector of pre-merger prices.
signature(object, preMerger= TRUE)
Computes a k x k matrix of diversion ratios.
signature(object , preMerger
Computes a k x k matrix of own and cross-price elasticities.
Displays the percentage change in prices due to the merger.
Summarizes the effect of the merger, including price and revenue changes. Setting ‘revenue’ equal to FALSE reports quantity rather than revenue changes. Setting ‘parameters’ equal to TRUE reports all demand parameters. ‘digits’ controls the number of significant digits reported in output.
Charles Taragin [email protected]
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