Even if true abnormal returns are uncorrelated, estimated abnormal returns are not. This paper presents a simple formula for the variance of estimated cumulative abnormal returns. Both returns and dummy variable procedures for estimating the standard error correctly, taking account of both...

We explain the issues in the Federal Trade Commission (FTC’s) antitrust investigation into whether Google’s use of “Universal” search results violated the antitrust laws and assess the role for economics in the FTC’s decision to close the investigation. We argue that the presence of...

The Lerner relationship linking the profit-maximizing price to marginal cost and the elasticity of demand generalizes to the price-setting newsvendor, and the result resolves the puzzle over the different effects of additive and multiplicative uncertainty on the solution. Multiplicative...

We apply and extend the cost-based approach to bundling and tying under competition developed in Evans and Salinger (2004a) to over-the-counter pain relievers and cold medicines. We document that consumers pay much less for tablets with multiple ingredients than they would to buy tablets with...

We apply and extend the cost-based approach to bundling and tying under competition developed in Evans and Salinger (2004) to over-the-counter pain relievers and cold medicines. We document that consumers pay much less for tablets with multiple ingredients than they would if they bought tablets...

This paper discusses appropriate methodology for measuring the effect of an event on the value of a firm's equity. Th e key points are (1) cumulative abnormal returns do not measure the effect of an event on firm value if there are dividends during the event window; (2) it is generally...

In November 2007, the European Commission accepted a set of guidelines concerning its review of non-horizontal mergers. The section on conglomerate mergers contains a discussion of the possibility that merging firms will bundle their products together. It reads, in part: "[W]hen producers of...

With a major set of hearings scheduled in the United States on the antitrust treatment of single-firm conduct, economists have an opportunity to provide analysis that informs policy. Yet, the opportunity will be lost if economic analysis does not provide insights into how to distinguish...

This article is a transcript of the presentations given by Dennis Carlton and Michael Salinger at the University College London’s Annual Antitrust and Regulation Forum held on February 21, 2007 and hosted by the Jevons Institute for Competition Law and Economics.