Abstract
AbstractThe paper analyzes gross upward pricing pressure indices—$$\texttt {iGUPPI}$$
iGUPPI
—to assess the anti-competitive effects of mergers between vertically integrated firms where independent rivals are active in the downstream market. Such indices could be used, for example, to screen mergers between mobile network operators that compete with mobile virtual network operators in the downstream retail market. It is shown that the $$\texttt {iGUPPI}$$
iGUPPI
for the downstream divisions of the merging firms corresponds to the sum of two well-known upward pricing pressure indices: the $$\texttt {GUPPI}$$
GUPPI
concept of Salop and Moresi (Georget Law J, 2009), and the $$\texttt {vGUPPI}$$
vGUPPI
concept of Moresi and Salop (Antitrust Law J 79(1):185–214, 2013). However, this simple decomposition does not hold for their upstream divisions a priori. Here, additional effects that are not included in the two concepts arise. Further assumptions with respect to the price reactions of the downstream divisions to increases in the input prices are imposed so that the $$\texttt {iGUPPI}$$
iGUPPI
for the upstream divisions is decomposable into an upstream market version of the $$\texttt {GUPPI}$$
GUPPI
and the $$\texttt {vGUPPI}$$
vGUPPI
.
Publisher
Springer Science and Business Media LLC
Subject
Management of Technology and Innovation,Organizational Behavior and Human Resource Management,Strategy and Management,Economics and Econometrics
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