A Net Present Value Approach to Merger Analysis

The rise of unilateral effects analysis, as quantified by merger simulation, creates the potential to balance anticompetitive effects and efficiencies and improve the merger review process.  Unfortunately, sophisticated economic models impose a tight structure on the analytical process, one that ignores the probability that the various effects will occur and focuses only on a rough estimate of the merger’s price effect.  We propose to address these problems by the application of a simple ris