Using store-level scanner data, elasticity matrices are estimated using a twotiered demand system. Two basic models are estimated, one with promotion variables and one without. Differences between the estimates across the two models are statistically significant. However, when the elasticities are used as 'inputs' into several simulation exercises, there are only small differences in merger effects and patent damage estimates.The results suggest that the differences are not 'economically' significant.Antitrust, Aids Demand, Merger Simulation, Patent Damage Simulation, Scanner Data, Omitted Variables Bias,

Some applications of Nash bargaining in the antitrust analysis of reverse payment settlements estimate the bargaining power parameter as the split of the surplus in the actual settlement with alleged reverse payments. This estimated parameter is then used as the bargaining power parameter in the but-for world where reverse payments are prohibited. We demonstrate that this approach is incorrect. Indeed, in the but-for world there could theoretically be an alternative “no payment” settlement where reverse payments are prohibited. However, the prohibition on reverse payments disproportionately affects the shape of the bargaining set in favor of the patent holder. With this asymmetry in the bargaining set, the estimated “bargaining power” in the actual world (with a settlement) no longer accurately reflects the split of the surplus that would have been agreed during the but-for negotiation with no payments. Moreover, we find that keeping the split of the surplus constant between the actual and but-for worlds is not innocuous because it overestimates the extent of alleged generic delay.

No abstract

No abstract