tailieunhanh - Quantitative Techniques for Competition and Antitrust Analysis_12

Tham khảo tài liệu 'quantitative techniques for competition and antitrust analysis_12', kinh doanh - tiếp thị, quản trị kinh doanh phục vụ nhu cầu học tập, nghiên cứu và làm việc hiệu quả | . Quantifying Damages of a Cartel 373 Figure . Pass-on with elastic and inelastic demand. For a formal demonstration consider a price-taking firm solving rnuxpq - C q c where C ạ c represents the totalcostfunctionandcrepresentsacost this problem we derive the firm supply firnction q s p c an-fro m that in turn given N identical firms we derive an industry supply curve S p cf increasing in p and decreasing in c. We may nowOefivie alcnriioii F p c D - .pcc o which implicitly defines the equittdoiomprtceasa funcrinnodnnr cossdcivee c. We can then apply the Implicit Function Theorem to get an expression for the pass-through dp de. specifically totally differentiating givus dD p _3S nc OS n sO 9o dp n e de which in turn suggests that whrcthecfownotruam marlrstispeofeneCy the pass-on effect can be expressed as ru ru r de de V-ế c dInS p-o r . PhiZSQO 9rnrcc c de dp 9p where the latter equality follows by notingfirst that @ p S p c second that for any nonzero differentiable function f p we can wrise ainZO _ 1 W _o qep 374 7. Damage Estimation and thirdly by multiplying top and bottom by minus one. Finally note that i the demand elasticity is negative while the supply elasticity is positive so that the denominator will be positive and ii supply will decline as costs increase so that the numerator is also positive making theratiopositive so thatequfiidrmm la-ii a s invrease with cost dp de 0. Furthermore wm cenclude Fun the pass-on iIci cicIs vn ec tìi the demand and supply elasticitius as well ns on il es cost elasticity elastic demand or elastic supply make sue dcaominaterlasge and Seaccaeduce tie pass-through down toward zero. Similarly andintuitively whee thecsst elasticity 0-supply is small so that costs tendnottesmmecs oncbilttn tosupktn she dowectauam good the rate of pass-through win bu smelL Verboven and Van Dijk 2007 derivetheenalotiaei tormulasfordio pestsun aute under perfectly competitive markeasand .