Module 5

Module 5: Quantitative Analysis of Competition Policy

(targeted to working economists and postgraduate students specialising in Competition and Regulation) (12 a.h.¹)

Outline of Course Contents

A. Measuring market power

1. Demand versus production approach

2. Homogeneous products

a. Measuring market power with known conduct

b. Identification of conduct

3. Differentiated products

a. Representative consumer models (including multi-stage budgeting and distance-metric approach)

b. Discrete choice models (including logit, nested logit and random coefficients logit)

B. Applications to competition policy

1. Relevant market definition

a. Critical loss and break-even analysis

b. SSNIP-test with differentiated products

2. Impact of cartels and other agreements

a. Framework for cartel damages

b. Measuring the price overcharge

c. Implementing the passing-on defense

d. Vertical agreements

3. Merger analysis

a. Indicative price rise, upward pricing pressure, and merger simulation

b. Efficiency defense

c. Price-concentration analysis

d. Ex post merger evaluation

Main references

  • S. Bishop and M. Walker, “The Economics of Competition Law: Concepts, Applications and Measurement”,
    Sweet & Maxwell.
  • E. Garces and P. Davis (2009) “Quantitative Techniques for Competition and Antitrust Analysis”, Princeton
    University Press.
  • For a review of basic econometrics: J. Stock and M. Watson, “Introduction to Econometrics”, Pearson Addison

¹ a.h. = academic hour (50 minutes)