Farrell and Shapiro (2008) have proposed a test – called the Upward Pricing Pressure (UPP) test – to evaluate potential unilateral effects of horizontal mergers. The general conclusion that seems to emerge from this comment is that the UPP test proposed by Farrell and Shapiro (suitably interpreted and properly implemented) could be useful for gauging potential unilateral effects in a variety of industries. In particular, the UPP test – or other “price pressure indices” – could be used, possibly together with other considerations, to establish a “safe harbor” for unilateral effects and/or a presumption of potentially adverse unilateral effects.
Why a hotel room in New York costs $500 a night
In a recent op-ed in The Wall Street Journal titled “Why a Hotel Room in NY Costs $500,” Michael Salinger (CRA consultant and Boston University professor) and...