Unilateral Effects Analysis: The Case of Retail Horizontal Mergers

Romanian Competition Journal, No.2/2013

10 Pages Posted: 26 Jan 2014

See all articles by Oana Romano

Oana Romano

Romanian Competition Council

Danusia Vamvu

Romanian Competition Council

Date Written: December 16, 2013

Abstract

The use of the Upward Pricing Pressure Test (hereafter referred to as the UPP test or the UPP methodology) for the unilateral effects analysis of merger cases which was developed by antitrust economists Joseph Farrell and Carl Shapiro marks a new era in merger evaluation field and offers a viable alternative to traditional methods. This paper studies the applicability and peculiarities of such a methodology and presents the feasibility of using the UPP test by competition authorities for ex-ante analysis of unilateral effects in retail horizontal mergers. Retail merger cases evaluated by the Romanian Competition Council have shown that competition authorities could rely on UPP and GUPPI methodologies when analyzing the unilateral effects of retail mergers as complying or not with the inequalities as well as information obtained in intermediate stages constitute additional arguments when formulating the decision regarding such mergers.

Keywords: unilateral effects, merger, ex-ante analysis, diversion ratio, retail

JEL Classification: L41, L44, L49

Suggested Citation

Romano, Oana and Vamvu, Danusia, Unilateral Effects Analysis: The Case of Retail Horizontal Mergers (December 16, 2013). Romanian Competition Journal, No.2/2013, Available at SSRN: https://ssrn.com/abstract=2384557

Oana Romano (Contact Author)

Romanian Competition Council ( email )

Piata Presei Libere, no. 1
corp D1, Sector 1
Bucharest, 013701
Romania

Danusia Vamvu

Romanian Competition Council ( email )

Piata Presei Libere, no. 1
corp D1, Sector 1
Bucharest, 013701
Romania

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