A CRA expert was retained to analyze a potential failing firm claim in a proposed joint venture. The parties claimed that the relevant market was too small to accommodate two competitors. CRA’s expert performed a financial analysis of the company, including an analysis of the historical performance, projections, business plans, and alternative uses of the assets employed in their businesses. Our expert documented that both companies began to lose money when the second firm entered the market, that there was no prospect for improvement, and that ultimately one of the firms could be expected to exit. The antitrust regulator accepted CRA’s analysis and allowed the joint venture to proceed.
Merger simulation in second-score auctions: A nested logit model
In a recent Economics Letters article, CRA’s Martino De Stefano and Serge Moresi show how to improve the second-score auction model that is often used to...