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The Effect of Mergers on Consumer Prices: Evidence from Five Mergers on the Enforcement Margin

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Author Info

  • Orley Ashenfelter
  • Daniel Hosken

Abstract

In this paper we propose a method to evaluate the effectiveness of U.S. horizontal merger policy and apply it to the study of five recently consummated consumer products mergers. We select the mergers from those that, from the public record, seem most likely to be problematic. Thus, we estimate an upper bound on the likely price effect of completed mergers. Our study employs retail scanner data and uses familiar panel data program evaluation procedures to measure price changes. Our results indicate that four of the five mergers resulted in some increases in consumer prices, while the fifth merger had little effect.

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File URL: http://www.jstor.org/stable/pdfplus/10.1086/605092
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File URL: http://www.jstor.org/stable/full/10.1086/605092
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Bibliographic Info

Article provided by University of Chicago Press in its journal The Journal of Law and Economics.

Volume (Year): 53 (2010)
Issue (Month): 3 ()
Pages: 417 - 466

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Handle: RePEc:ucp:jlawec:doi:10.1086/605092

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Web page: http://www.journals.uchicago.edu/JLE/

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Cited by:
  1. Nilsen, Øivind Anti & Sørgard, Lars & Ulsaker, Simen A., 2013. "Upstream Merger in a Successive Oligopoly: Who Pays the Price?," Discussion Paper Series in Economics 17/2013, Department of Economics, Norwegian School of Economics.
  2. Eugenio J. Miravete & Katja Seim & Jeff Thurk, 2014. "Complexity, Efficiency, and Fairness of Multi-Product Monopoly Pricing," CESifo Working Paper Series 4692, CESifo Group Munich.
  3. De Nijs, Romain, 2012. "The price discrimination effect of a large merger of parking garages," Economics Letters, Elsevier, vol. 117(3), pages 928-931.
  4. Stephen Martin, 2012. "Market Structure and Market Performance," Review of Industrial Organization, Springer, vol. 40(2), pages 87-108, March.
  5. Joseph Farrell & Paul Pautler & Michael Vita, 2009. "Economics at the FTC: Retrospective Merger Analysis with a Focus on Hospitals," Review of Industrial Organization, Springer, vol. 35(4), pages 369-385, December.
  6. Marie-Laure Allain & Claire Chambolle & Stéphane Turolla & Sofia Villas-Boas, 2013. "The Impact of Retail Mergers on Food Prices: Evidence from France," Working Papers hal-00920460, HAL.
  7. Brito, Duarte & Pereira, Pedro & Ramalho, Joaquim J.S., 2013. "Mergers, coordinated effects and efficiency in the Portuguese non-life insurance industry," International Journal of Industrial Organization, Elsevier, vol. 31(5), pages 554-568.
  8. Gugler, Klaus & Szücs, Florian, 2013. "Spillover effects in oligopolistic markets," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79905, Verein für Socialpolitik / German Economic Association.
  9. Koski, Heli & Pajarinen, Mika, 2013. "Empirical Evaluation of the Effectiveness of Competition Policy," ETLA Working Papers 15, The Research Institute of the Finnish Economy.
  10. Emilie Dargaud, 2013. "Horizontal mergers, efficiency gains and remedies," European Journal of Law and Economics, Springer, vol. 36(2), pages 349-372, October.

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