Econometric Methods in Staples

Author
Keywords
Abstract

Econometrics played a major role in the investigation and litigation of the Federal Trade Commission’s (FTC) successful challenge to the proposed merger between two office superstore chains, Staples and Office Depot. Our goal in writing this essay is to describe the econometric issues at stake in evaluating the FTC’s central claim that the price charged by office supply superstores was related to the number and identity of superstore firms participating in the market. Similar statistical models were relied upon by the FTC and the merging firms to analyze pricing. Our discussion of these models highlights the advantages and disadvantages of alternative approaches to analyzing a panel data set: cross-sectional estimates versus fixed effects estimates. We also describe and evaluate modeling choices that appeared to have substantial influence on the empirical results.

Year of Publication
2004
Number
486
Date Published
05/2004
Publication Language
eng
Citation Key
8265
URL
Working Papers