No abstract

Using only information local to the pre-merger equilibrium, we derive approximations of the expected changes in prices and welfare generated by a merger. We extend the pricing pressure approach of recent work to allow for non-Bertrand conduct, adjusting the diversion ratio and incorporating the change in anticipated accommodation. To convert pricing pressures into quantitative estimates of price changes, we multiply them by the merger pass-through matrix, which is close under conditions we specify to the pre-merger rate at which cost increases are passed through to prices. Weighting the price changes by quantities gives the change in consumer surplus. How should we predict the unilateral impact of a merger on prices and welfare? The United States and United Kingdom horizontal merger guidelines released last year incorporate an approach based on the work of Werden (1996), Farrell and Shapiro (2010a) and others that uses information local to pre-merger prices to indicate the directional impacts of the mergers. This "first-order" approach to merger analysis (FOAM) is admirable for adopting both the simplicity and transparency of approaches based on market definition and the firm grounding in formal economics of market simulations. This paper takes this strategy a step further, attempting to incorporate the remaining strengths of alternative approaches: the quantitative precision of merger simulation and the agnosticism about market conduct and cost structures embodied in market definition. We show that FOAM, thus modified, provides * We could not have written this paper without the encouragement and guidance of Joe Farrell and Carl Shapiro. We are also grateful to

No abstract

We examine the profitability and implications of online discount vouchers, a relatively new marketing tool that offers consumers large discounts when they prepay for participating firms' goods and services. Within a model of repeat experience good purchase, we examine two mechanisms whereby a discount voucher service can benefit affiliated firms: price discrimination and advertising. For vouchers to provide successful price discrimination, the valuations of consumers with access to vouchers must generally be lower than those of consumers who do not have access to vouchers. Offering vouchers tends to be more profitable for firms that are patient or relatively unknown, and for firms with low marginal costs. Extensions to our model accommodate the possibilities of firm price reoptimization and multiple voucher purchases. We find potential benefits of online discount vouchers to certain firms in certain circumstances, but vouchers are likely to increase firm profits under relatively narrow conditions.

The COVID-19 pandemic has shaken the world to its core and has provoked an overnight exodus of developers who normally worked in an office setting to working from home. The magnitude of this shift and the factors that have accompanied this new unplanned work setting go beyond what the software engineering community has previously understood to be remote work. To find out how developers and their productivity were affected, we distributed two surveys (with a combined total of 3,634 responses that answered all required questions) weeks apart to understand the presence and prevalence of the benefits, challenges, and opportunities to improve this special circumstance of remote work. From our thematic qualitative analysis and statistical quantitative analysis, we find that there is a dichotomy of developer experiences influenced by many different factors (that for some are a benefit, while for others a challenge). For example, a benefit for some was being close to family members but for others having family members share their working space and interrupting their focus, was a challenge. Our surveys led to powerful narratives from respondents and revealed the scale at which these experiences exist to provide insights as to how the future of (pandemic) remote work can evolve.