Revolutionizing Competition Policy: New Model Predicts Price Effects of Mergers
The article compares different models used to understand how consumers choose between products. By analyzing simulated and real data, the researchers found that a more complex model called RCNL is better at predicting consumer behavior than simpler models like NL and RC. The RCNL model also provides more accurate predictions for the effects of mergers on prices. However, the models differ in defining market boundaries. Overall, the study suggests that considering different factors that influence consumer choices is crucial for accurate market analysis.