Simulating mergers in a vertical supply chain with bargaining

We model a two-level supply chain where Nash bargaining occurs upstream and firms compete in logit setting downstream, either via Bertrand price or an auction. The parameters can be calibrated with discrete set of data on prices, margins, market shares, facilitating use by antitrust practitioners. perform numerical simulations to identify cases modelling the full vertical structure is important harm likely. also examine thwarted Anthem/Cigna merger show how weighs various arguments made government defendants.