TESTING MODELS OF DIFFERENTIATED PRODUCTS MARKETS: CONSOLIDATION IN THE CABLE TV INDUSTRY

• 成果类型: Article
• 署名作者: Byrne, David P.
• 署名单位: University of Melbourne
• 刊物名称: INTERNATIONAL ECONOMIC REVIEW
• ISSN/ISSBN: 0020-6598
• DOI: 10.1111/iere.12123
• 发表日期: 2015
• 页码: 805-850
• 关键词: static oligopoly models; horizontal integration; vertical integration; mergers; POWER; COMPETITION; demand; performance; prices; IMPACT

摘要

Research on differentiated products markets often uses structural demand/supply models to identify firms' marginal costs as product-level cost data are unavailable. Using unique demand and cost data from cable TV, I evaluate a differentiated products model's ability to identify marginal costs. I find firms systematically price below profit-maximizing levels, leading to biases in the model's marginal cost estimates. I study the implications for merger simulations and find that these biases compromise estimates of merger-related cost efficiencies, yet do not prevent these models from generating useful predictions of the price and nonprice effects of mergers.