antitrust (version 0.99.8)

Logit-class: Class “Logit”

Description

The “Logit” class contains all the information needed to calibrate a Logit 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 logit.

Slots

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

prices:

A length k vector of product prices.

margins:

A length k vector of product margins, some of which may equal NA.

normIndex:

An integer specifying the product index against which the mean values of all other products are normalized.

shareInside:

The share of customers that purchase any of the products included in the `prices' vector.

priceOutside:

The price of the outside good. Default is 0.

slopes:

A list containing the coefficient on price (‘alpha’) and the vector of mean valuations (‘meanval’)

mktElast:

A length 1 vector of market elasticities.

priceStart:

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

insideSize:

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

mktSize:

A positive number equal to total quantities (revenues for CES) pre-merger for all products in the simulations as well as the outside good.

Extends

Class '>Bertrand, directly. Class '>Antitrust, by class '>Bertrand, 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.

calcPrices

signature(object = Logit, preMerger = TRUE,isMax=FALSE,...)

Compute either pre-merger or post-merger equilibrium prices under the assumptions that consumer demand is Logit 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.

calcPriceDeltaHypoMon

signature(object = Logit,prodIndex,...)

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

calcShares

signature(object = Logit, preMerger = TRUE,revenue = FALSE)

Compute either pre-merger or post-merger equilibrium shares under the assumptions that consumer demand is Logit and firms play a differentiated product Bertrand Nash pricing game. ‘revenue’ takes on a value of TRUE or FALSE, where TRUE calculates revenue shares, while FALSE calculates quantity shares.

calcSlopes

signature(object = Logit)

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

CV

signature(object = Logit)

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.

elast

signature(object = Logit, preMerger = TRUE)

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

Examples

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