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Merger Effects and Antitrust Enforcement: Evidence from US Consumer Packaged Goods

Author

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  • Vivek Bhattacharya
  • Gastón Illanes
  • David Stillerman

Abstract

We document the effects of a comprehensive set of mergers of US consumer packaged goods manufacturers on prices, quantities, and product assortment. Across a range of specifications, we find a small average price effect of mergers (-0.6% to 1.6%) but substantial heterogeneity in effects, with a standard deviation between 5.3–6.7 pp. Through a model of enforcement, we find that agencies challenge mergers they expect would increase prices more than about 4%–8%. Modest increases in stringency would reduce prices and the prevalence of completed price-increasing mergers, with minimal impacts on blocked price-decreasing mergers, at a significantly greater agency burden.

Suggested Citation

  • Vivek Bhattacharya & Gastón Illanes & David Stillerman, 2023. "Merger Effects and Antitrust Enforcement: Evidence from US Consumer Packaged Goods," NBER Working Papers 31123, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:31123
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    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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