Logit-class: Class "Logit"

Description Objects from the Class Slots Extends Methods Author(s) Examples

Description

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

Objects from the Class

Objects can be created by using the constructor function logit.

Slots

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

prices:

A length k vector of product prices.

margins:

A length k vector of product margins, some of which may equal NA.

normIndex:

An integer specifying the product index against which the mean values of all other products are normalized.

shareInside:

The share of customers that purchase any of the products included in the ‘prices’ vector.

priceOutside:

The price of the outside good. Default is 0.

slopes:

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

mktElast:

A length 1 vector of market elasticities.

priceStart:

A length-k vector of starting prices for the non-linear solver

insideSize:

A positive number equal to total pre-merger quantities (revenues for CES) for all products included in the simulation.

mktSize:

A positive number equal to total quantities (revenues for CES) pre-merger for all products in the simulations as well as the outside good.

Extends

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

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.

calcPrices

signature(object = Logit, preMerger = TRUE,isMax=FALSE,...)

Compute either pre-merger or post-merger equilibrium prices under the assumptions that consumer demand is Logit 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.

calcPriceDeltaHypoMon

signature(object = Logit,prodIndex,...)

Calculates the price changes that a Hypothetical Monopolist would impose on its products relative to pre-merger prices.

calcShares

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

Compute either pre-merger or post-merger equilibrium shares under the assumptions that consumer demand is Logit 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 = Logit)

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

CV

signature(object = Logit)

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.

elast

signature(object = Logit, preMerger = TRUE)

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

Author(s)

Charles Taragin [email protected]

Examples

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

antitrust documentation built on June 10, 2018, 5:04 p.m.