The Antitrust Logit Model for Predicting Unilateral Competitive Effects

The ALM is a logit model, which is a particular random utility choice model. In that broad class of models, each consumer makes a single choice from a “choice set,” generally consisting of certain “inside goods” and an “outside good,” reflecting the choice of “none of the above.” While similar in concept, the inside goods may be more or less inclusive than a relevant antitrust market. Because consumers make a single choice, each good is a substitute for all others in the choice set.