Practical Considerations for UPP Analysis

Malcolm Coate, Jun 22, 2011

A recent edition of the CPI Antitrust Chronicle provided a range of perspectives on the applicability of the Upward Pricing Pressure (“UPP”) model to merger analysis. A number of key insights (e.g., the relevance of market definition, the usefulness of an UPP screen, the similarity between UPP and merger simulation, and the need to validate the predictions of a theoretical model) were explored in some detail. However, the bulk of the discussion left something of a gap between theory and reality, because practical considerations affecting the applicability of the UPP methodology were not fully addressed. By drawing on insights from the Federal Trade Commission’s years of experience, I present some supplemental thoughts on these topics.

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