Why We Need to Measure the Effect of Merger Policy and How to Do It
AbstractIn this article, I explain the inadequacy of our current state of knowledge regarding the effectiveness of antitrust policy towards mergers. I then discuss the types of data that one must collect in order to be able to perform an analysis of the effectiveness of antitrust policy. There are two types of data one requires in order to perform such an analysis. One is data on the relevant market pre and post merger. The second is data on the specific predictions of the government agencies about the market post-merger. A key point of this article is to stress how weak an analysis of only the first type of data is. The frequent call for retrospective studies typically envisions relying on just this type of data, but the limitations on the analysis are not well understood. As I explain below, retrospective studies that ask whether prices went up post merger are surprisingly poor guides for analyzing merger policy. It is only when the second type of data is combined with the first type that a reliable analysis of antitrust policy can be carried out. There is a need both to collect the necessary data and to analyze it correctly.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14719.
Date of creation: Feb 2009
Date of revision:
Publication status: published as Dennis Carlton, 2009. "Why We Need to Measure the Effect of Merger Policy and How to Do It," CPI Journal, Competition Policy International, vol. 5.
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Other versions of this item:
- Unknown & Dennis Carlton, 2009. "Why We Need to Measure the Effect of Merger Policy and How to Do It," CPI Journal, Competition Policy International, Competition Policy International, vol. 5.
- C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- L4 - Industrial Organization - - Antitrust Issues and Policies
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-02-22 (All new papers)
- NEP-COM-2009-02-22 (Industrial Competition)
- NEP-LAW-2009-02-22 (Law & Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Orley Ashenfelter & Daniel Hosken, 2008.
"The Effect of Mergers on Consumer Prices: Evidence from Five Selected Case Studies,"
Working Papers, Princeton University, Department of Economics, Center for Economic Policy Studies.
1037, Princeton University, Department of Economics, Center for Economic Policy Studies..
- Orley Ashenfelter & Daniel Hosken, 2008. "The Effect of Mergers on Consumer Prices: Evidence from Five Selected Case Studies," NBER Working Papers 13859, National Bureau of Economic Research, Inc.
- 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,
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- Joseph Farrell & Paul Pautler & Michael Vita, 2009. "Economics at the FTC: Retrospective Merger Analysis with a Focus on Hospitals," Review of Industrial Organization, Springer, Springer, vol. 35(4), pages 369-385, December.
- Mattia Guidi, 2011. "Does Independence Affect Regulatory Performance? The case of national competition authorities in the European Union," EUI-RSCAS Working Papers, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS) 64, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
- Davies, Stephen & Olczak, Matthew & Coles, Heather, 2011. "Tacit collusion, firm asymmetries and numbers: Evidence from EC merger cases," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 29(2), pages 221-231, March.
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