CES-class: Class "CES" In antitrust: Tools for Antitrust Practitioners

Description

The “CES” class contains all the information needed to calibrate a CES demand system and perform a merger simulation analysis under the assumption that firms are playing a differentiated Bertrand pricing game.

Objects from the Class

Objects can be created by using the constructor function ces.

Slots

Let k denote the number of products produced by all firms.

slopes:

A list containing the coefficient on the numeraire (‘alpha’), the coefficient on price (‘gamma’), and the vector of mean valuations (‘meanval’)

priceOutside:

The price of the outside good. Default is 1.

Extends

Class Logit, directly. Class Bertrand, by class Logit, distance 2. Class Antitrust, by class Bertrand, distance 3.

Methods

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.

calcShares

signature(object, preMerger = TRUE,revenue=FALSE)

Compute either pre-merger or post-merger equilibrium revenue shares under the assumptions that consumer demand is CES and firms play a differentiated product Bertrand Nash pricing game. ‘revenue’ takes on a value of TRUE or FALSE, where TRUE calculates revenue shares, while FALSE calculates quantity shares.

calcSlopes

signature(object)

Uncover CES demand parameters. Assumes that firms are currently at equilibrium in a differentiated product Bertrand Nash pricing game.

CV

signature(object, revenueInside)

Calculates compensating variation. If ‘revenueInside’ is missing, then CV returns compensating variation as a percent of the representative consumer's income. If ‘revenueInside’ equals the total expenditure on all products inside the market, then CV returns compensating variation in levels.

elast

signature(object, preMerger = TRUE)

Computes a k x k matrix of own and cross-price elasticities.

Author(s)

Charles Taragin [email protected]

Examples

 1 2 showClass("CES") # get a detailed description of the class showMethods(classes="CES") # show all methods defined for the class

antitrust documentation built on May 18, 2018, 9:03 a.m.