In this article in Antitrust Law Journal, Sean Durkin shows that the discount attribution test provides a simple, intuitive way to illustrate the procompetitive benefits of loyalty discounts. Using a model of competition implied by the discount attribution test, the article shows how competition can increase when sellers can offer loyalty discounts relative to a situation where they can only offer a single, unconditional price. The results of the model also highlight the flaws in claims often made by plaintiffs and their experts regarding the competitive effects of loyalty discounts.
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...