Advanced Search
MyIDEAS: Login to save this paper or follow this series

Ex-post Merger Evaluation in the UK Retail Market for Books

Contents:

Author Info

  • Duso, Tomaso
  • Argentesi, Elena
  • Aguzzoni, Luca
  • Ciari, Lorenzo
  • Tognoni, Massimo

Abstract

This paper empirically evaluates the effects of a merger between the two largest book retail chains in the UK. We build an original dataset of book titles with data on the prices at the store level and at the national level. We then apply difference-in-differences techniques to assess the impact of the merger. A key feature of the books market is that titles become obsolete very quickly. Therefore, we compare different titles before and after the merger in an hedonic approach. Since retail mergers may have either local or national effects (or both) according to the level at which retail chains set prices, we undertake an ex post assessment of the impact of the merger at both aggregation levels. At the local level, we compare the changes in the average price charged before and after the merger in the shops located in overlap areas (i.e. areas where both chains were present before the merger) and in non-overlap areas (i.e. areas where only one chain was present before the merger). Our results do not show any significant difference between non-overlap and overlap areas where the merger could have been expected to generate the strongest effect. To investigate the effects of the merger at the national level, we employ two distinct control groups, namely the competitors and the top-selling titles. In both cases we find that the merger did not result in an increase in prices at the national level. --

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://econstor.eu/bitstream/10419/80025/1/VfS_2013_pid_134.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order with number 80025.

as in new window
Length:
Date of creation: 2013
Date of revision:
Handle: RePEc:zbw:vfsc13:80025

Contact details of provider:
Email:
Web page: http://www.socialpolitik.org/
More information through EDIRC

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
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.:
as in new window
  1. Orley C. Ashenfelter & Daniel Hosken & Matthew Weinberg, 2009. "Generating Evidence to Guide Merger Enforcement," Working Papers, Princeton University, Department of Economics, Center for Economic Policy Studies. 1137, Princeton University, Department of Economics, Center for Economic Policy Studies..
  2. Davis, Peter, 2005. "The Effect of Local Competition on Admission Prices in the U.S. Motion Picture Exhibition Market," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 48(2), pages 677-708, October.
  3. Matthew Weinberg, 2007. "The Price Effects of Horizontal Mergers: A Survey," Working Papers, Princeton University, Department of Economics, Center for Economic Policy Studies. 62, Princeton University, Department of Economics, Center for Economic Policy Studies..
  4. Jonathan Beck, 2004. "Fixed, Focal, Fair? Book Prices Under Optional Resale Price Maintenance," CIG Working Papers, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG) SP II 2004-15, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  5. Christina Schmidt-Stolting & Eva Blomeke & Michel Clement, 2011. "Success Drivers of Fiction Books: An Empirical Analysis of Hardcover and Paperback Editions in Germany," Journal of Media Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 24(1), pages 24-47.
  6. Jerry A. Hausman & Jeffrey K. MacKie-Mason, 1988. "Price Discrimination and Patent Policy," RAND Journal of Economics, The RAND Corporation, vol. 19(2), pages 253-265, Summer.
  7. Ariel Pakes, 2003. "A Reconsideration of Hedonic Price Indexes with an Application to PC's," American Economic Review, American Economic Association, American Economic Association, vol. 93(5), pages 1578-1596, December.
  8. Clerides, Sofronis K., 2002. "Book value: intertemporal pricing and quality discrimination in the US market for books," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 20(10), pages 1385-1408, December.
  9. Orley C. Ashenfelter & Daniel S. Hosken & Matthew C. Weinberg, 2011. "The Price Effects of a Large Merger of Manufacturers: A Case Study of Maytag-Whirlpool," NBER Working Papers 17476, National Bureau of Economic Research, Inc.
  10. Peter Davis, 2006. "Spatial competition in retail markets: movie theaters," RAND Journal of Economics, RAND Corporation, vol. 37(4), pages 964-982, December.
  11. Justine S. Hastings, 2004. "Vertical Relationships and Competition in Retail Gasoline Markets: Empirical Evidence from Contract Changes in Southern California," American Economic Review, American Economic Association, American Economic Association, vol. 94(1), pages 317-328, March.
  12. Inderst, Roman & Shaffer, Greg, 2004. "Retail Mergers: Buyer Power and Product Variety," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4236, C.E.P.R. Discussion Papers.
  13. Philippe Chone & Laurent Linnemer, 2010. "A Treatment Effect Method for Merger Analysis with an Application to Parking Prices in Paris," Working Papers, Centre de Recherche en Economie et Statistique 2010-48, Centre de Recherche en Economie et Statistique.
  14. 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.
  15. repec:rje:randje:v:37:y:2006:i:4:p:964-982 is not listed on IDEAS
  16. Jonathan Beck, 2007. "The sales effect of word of mouth: a model for creative goods and estimates for novels," Journal of Cultural Economics, Springer, Springer, vol. 31(1), pages 5-23, March.
  17. Michel Clement & Dennis Proppe & Armin Rott, 2007. "Do Critics Make Bestsellers? Opinion Leaders and the Success of Books," Journal of Media Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 20(2), pages 77-105.
  18. Mark J. McCabe, 2002. "Journal Pricing and Mergers: A Portfolio Approach," American Economic Review, American Economic Association, American Economic Association, vol. 92(1), pages 259-269, March.
  19. Chandra, Ambarish & Collard-Wexler, Allan, 2008. "Mergers in Two-Sided Markets: An Application to the Canadian Newspaper Industry," MPRA Paper 7954, University Library of Munich, Germany.
  20. Clay, Karen, et al, 2002. "Retail Strategies on the Web: Price and Non-price Competition in the Online Book Industry," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 50(3), pages 351-67, September.
  21. Dario Focarelli & Fabio Panetta, 2003. "Are Mergers Beneficial to Consumers? Evidence from the Market for Bank Deposits," American Economic Review, American Economic Association, American Economic Association, vol. 93(4), pages 1152-1172, September.
  22. Aviv Nevo & Michael D. Whinston, 2010. "Taking the Dogma out of Econometrics: Structural Modeling and Credible Inference," Journal of Economic Perspectives, American Economic Association, American Economic Association, vol. 24(2), pages 69-82, Spring.
  23. Raymond Deneckere & Carl Davidson, 1985. "Incentives to Form Coalitions with Bertrand Competition," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 473-486, Winter.
  24. Alan T. Sorensen, 2007. "BESTSELLER LISTS AND PRODUCT VARIETY -super-* ," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 55(4), pages 715-738, December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Luca Aguzzoni & Elena Argentesi & Paolo Buccirossi & Lorenzo Ciari & Tomaso Duso & Massimo Tognoni & Cristiana Vitale, 2013. "They Played the Merger Game: A Retrospective Analysis in the UK Videogames Market," Discussion Papers of DIW Berlin 1330, DIW Berlin, German Institute for Economic Research.
  2. Marie-Laure Allain & Claire Chambolle & Stéphane Turolla & Sofia Villas-Boas, 2013. "The impact of retail mergers on food prices: evidence from France," Working Papers 181943, Institut National de la Recherche Agronomique, France.
  3. Marie-Laure Allain & Claire Chambolle & Stéphane Turolla & Sofia B. villas-boas, 2014. "The impact of retail mergers on food prices: evidence from France," Working Papers SMART - LERECO, INRA UMR SMART 14-02, INRA UMR SMART.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:zbw:vfsc13:80025. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ZBW - German National Library of Economics).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.