Simulating mergers in a vertical supply chain with bargaining

A-Tier
Journal: RAND Journal of Economics
Year: 2021
Volume: 52
Issue: 3
Pages: 596-632

Authors (2)

Score contribution per author:

2.011 = (α=2.01 / 2 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We model a two‐level supply chain where Nash bargaining occurs upstream and firms compete in a logit setting downstream, either via Bertrand price setting or an auction. The parameters can be calibrated with a discrete set of data on prices, margins, and market shares, facilitating use by antitrust practitioners. We perform numerical simulations to identify cases where modelling the full vertical structure is important and where harm is likely. We also examine the thwarted Anthem/Cigna merger and show how the model weighs the various arguments made by the government and the defendants.

Technical Details

RePEc Handle
repec:bla:randje:v:52:y:2021:i:3:p:596-632
Journal Field
Industrial Organization
Author Count
2
Added to Database
2026-01-29