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Churn Versus Diversion in Antitrust: An Illustrative Model
2016
Economica
An important question in merger analysis is how much of a ...rm's lost output after a unilateral price increase will shift to the merger partner. To estimate this diversion ratio, antitrust agencies sometimes use data on consumer switching ("churn"), potentially caused by various reasons. This paper uses a tractable model of oligopoly competition to investigate the relation between churn and diversion, depending on what caused the churn. If the cause is an exogenous decrease in a ...rm's
doi:10.1111/ecca.12207
fatcat:46pg3alezbgcxnt67g6vua7z34