antitrust (version 0.99.10)

AIDS-class: Class “AIDS”

Description

The “AIDS” class contains all the information needed to calibrate a AIDS demand system and perform a merger simulation analysis under the assumption that firms are playing a differentiated products Bertrand pricing game.

Objects from the Class

Objects can be created by using the constructor function aids.

Slots

Let k denote the number of products produced by all firms.

priceStart:

A length-k vector of starting prices for the non-linear solver

insideSize:

A positive number equal to total pre-merger revenues for all products included in the simulation.

mktElast:

A negative number equal to the industry pre-merger price elasticity.

parmStart:

A length 2 vector who elements equal to an initial of a single diagonal element of the matrix of slope coefficients, as well as the market elasticity.

priceDelta:

A length k vector containing the simulated price effects from the merger.

Extends

Class '>Linear, directly. Class '>Bertrand, by class “Linear”, distance 2.

Methods

For all of methods containing the ‘preMerger’ argument, ‘preMerger’ takes on a value of TRUE or FALSE, where TRUE invokes the method using the pre-merger ownership structure, while FALSE invokes the method using the post-merger ownership structure.

calcMargins

signature(object , preMerger=TRUE)

Calculates pre-merger or post-merger equilibrium margins.

calcPriceDelta

signature(object,isMax=FALSE,...)

Computes the proportional change in each products' price from the merger under the assumptions that consumer demand is AIDS and firms play a differentiated product Bertrand Nash pricing game.When isMax equals TRUE, a check is run to determine if the calculated equilibrium price vector locally maximizes profits. ‘...’ may be used to change the default values of BBsolve, the non-linear equation solver.

calcPrices

signature(object, preMerger = TRUE)

Compute either pre-merger or post-merger equilibrium prices under the assumptions that consumer demand is AIDS and firms play a differentiated product Bertrand Nash pricing game. return a vector of length-k vector of NAs if user did not supply prices.

calcPriceDeltaHypoMon

signature(object,prodIndex,...)

Calculates the price changes that a Hypothetical Monopolist would impose on its products relative to pre-merger prices.

calcShares

signature(object, preMerger = TRUE)

Computes either pre-merger or post-merger equilibrium quantity shares under the assumptions that consumer demand is AIDS and firms play a differentiated product Bertrand Nash pricing game.

calcSlopes

signature(object)

Uncover AIDS demand parameters. Assumes that firms are currently at equilibrium in a differentiated product Bertrand Nash pricing game.

cmcr

signature(object)

Calculates compensated marginal cost reduction, the percentage decrease in the marginal costs of the merging parties' products needed to offset a post-merger price increase.

CV

signature(object)

Calculate the amount of money a representative consumer would need to be paid to be just as well off as they were before the merger. Requires a length-k vector of pre-merger prices.

diversion

signature(object, preMerger= TRUE)

Computes a k x k matrix of diversion ratios.

elast

signature(object , preMerger = TRUE)

Computes a k x k matrix of own and cross-price elasticities.

Examples

# NOT RUN {
showClass("AIDS")           # get a detailed description of the class
showMethods(classes="AIDS") # show all methods defined for the class
# }