bertrand_vert_calibrate: Calibrate Bertrand model demand parameters

In mergersim: Merger Simulation and Calibration

Calibrate Bertrand model demand parameters

Description

Calibrate Bertrand model demand parameters

Usage

bertrand_vert_calibrate(param, own_down, price_r, shares, cost, price_w)

Arguments

param	Price coefficient, alpha
own_down	Ownership matrix for downstream firms
price_r	Downstream prices
shares	Market shares
cost	Marginal costs of downstream firm
price_w	Upstream or wholesale prices, treated as costs by downstream firms

Details

This function can be used to calibrate the demand parameters of a Bertrand model of competition that is the downstream market of a vertical supply chain. Wholesale prices are treated as costs by the downstream firms. Assumes logit demand.

Value

Objective function value

mergersim documentation built on July 21, 2026, 5:09 p.m.