Joshua Wright headshot

Professor of Law
Antonin Scalia Law School

Joshua D. Wright is University Professor and the Executive Director of the Global Antitrust Institute at Scalia Law School at George Mason University. In 2013, the Senate unanimously confirmed Professor Wright as a member of the Federal Trade Commission (FTC), following his nomination by President Obama.


Antitrust Mergers & Merger Enforcement

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More on the HMGs: Scoring Unilateral Effects with the GUPPI

Steve Salop, Serge Moresi, and John Woodbury have posted a very useful primer on the new HMGs new “value of diverted sales” approach to unilateral effects: the gross upward pricing pressure index (GUPPI).  Here’s the basic idea:

This concept of “value of diverted sales measured in proportion to the lost revenues attributable to the reduction in unit sales resulting from the price increase” can be converted into a metric for scoring the “upward pricing pressure” from the unilateral effects of a merger. Because this metric of upward pricing pressure does not take merger synergies or certain other factors into account, we refer to it as the Gross Upward Pricing Pressure Index or GUPPI for short.3 This particular descriptive name for the metric is not used in the Guidelines, but the metric is in fact the measurement described by the Guidelines. As explained below, the GUPPI also is useful for defining the relevant market under the hypothetical monopolist test set out in the Guidelines.

The “technical appendix” is not too technical for lawyers to understand and provides a very clean and simple presentation.   If you are looking to catch up on your HMG reading, its a good place to start.

Filed under: antitrust, economics, merger guidelines, mergers & acquisitions