The Price Effects of Horizontal Mergers: A Survey
نویسنده
چکیده
This paper surveys the literature on the price effects of horizontal mergers. The majority of mergers that have been examined in the nine studies conducted over the past 22 years resulted in increased prices for both the merging parties and rival firms, at least in the short run. There is some evidence that product prices increase after mergers are announced but before they are consummated. Acknowledgement: I would like to acknowledge helpful comments by Orley Ashenfelter and Dave Kamerschen, and financial support from the Center for Economic Policy Studies. The Price Effects of Horizontal Mergers: A Survey Matthew Weinberg∗ 23 January 2007 Abstract This paper surveys the literature on the price effects of horizontal mergers. The majority of mergers that have been examined in the nine studies conducted over the past 22 years resulted in increased prices for both the merging parties and rival firms, at least in the short run. There is some evidence that product prices increase after mergers are announced but before they are consummated.This paper surveys the literature on the price effects of horizontal mergers. The majority of mergers that have been examined in the nine studies conducted over the past 22 years resulted in increased prices for both the merging parties and rival firms, at least in the short run. There is some evidence that product prices increase after mergers are announced but before they are consummated.
منابع مشابه
Horizontal mergers in the presence of vertical relationships
We study welfare effects of horizontal mergers under a successive oligopoly model and find that downstream mergers can increase welfare if they reduce input prices. The lower input price shifts some input production from costinefficient upstream firms to cost-efficient ones. Also, the lower input price makes upstream entry less attractive, reduces the number of upstream entrants, and decreases ...
متن کاملHorizontal Mergers , Prices , and Productivity ∗ Job Market Paper
I estimate the price and productivity effects of horizontal mergers in the ready-mix concrete industry using plant and firm-level data from the US Census Bureau. Horizontal mergers involving plants in close proximity are associated with price increases and decreases in output, but also raise productivity at acquired plants. While there is a significant negative relationship between productivity...
متن کاملEquilibrium Price Dispersion, Mergers and Synergies: An Experimental Investigation of Differentiated Product Competition
This paper reports an experiment conducted to examine market performance and mergers in an asymmetric differentiated product oligopoly. We find that static Nash predictions organize mean market outcomes reasonably well. Markets on average respond to horizontal mergers with price increases as predicted and marginal cost synergies exert the predicted the power-mitigating price effects. Nash predi...
متن کاملHorizontal mergers with free entry
We consider the impact of horizontal mergers in the presence of free entry and exit. In contrast to much of the previous literature on horizontal mergers, our model yields predictions that seem intuitively reasonable: with only moderate cost synergies mergers of a small number of industry participants are beneficial (even under quantity competition), there is no “free rider problem” in that ins...
متن کاملEntry Deterrence by Non-Horizontal Merger
We study when and how pure non-horizontal mergers, whether cross-product or vertical, can deter new entry. Organizational mergers implicitly commit firms to more aggressive price competition. Because heightened competition deters entry, mergers can occur in equilibrium even when, absent entry considerations, they do not. We show that, in order to prevent a flood of entrants, mergers arise even ...
متن کامل