Abstract: Three Economist’s Tools for Antitrust and Merger Analysis: Case Applications

Three Economist’s Tools for Antitrust and Merger Analysis: Case Applications

Rusell Pittman, EAG 21-2, June 2021

Abstract:
This paper presents a non-technical introduction to three economic tools that have in recent years become widespread in competition law enforcement in general and in the analysis of proposed mergers in particular: critical loss analysis, upward pricing pressure, and the vertical arithmetic.  In addition, for each tool, its use in a recent U.S. merger case is illustrated:  for critical loss analysis, the Novelis/Aleris merger; for upward pricing pressure, the GE/Electrolux merger; and for the vertical arithmetic, the Comcast/NBCU joint venture.

Keywords: Merger enforcement; Critical loss analysis; Upward pricing pressure; Vertical arithmetic; Horizontal mergers; Vertical mergers; Antitrust economics.