Merger simulation is a commonly used technique when analyzing potential welfare costs and benefits of mergers between firms. Merger simulation models differ with respect to assumed form of competition that best describes the market (e.g. differentiated Bertrand competition, Cournot competition, auction models, etc.) as well as the structure of the chosen demand system (e.g. linear or log-linear demand, logit, almost ideal demand system (AIDS), etc.)
- Oliver Budzinski and Isabel Ruhmer, Merger Simulation in Competition Policy: A Survey, Journal of Competition Law & Economics (2010), 6(2): 277-319.
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