IDEAS home Printed from https://ideas.repec.org/a/bla/jindec/v73y2025i4p523-539.html

Upward Pricing Pressure in Mergers Where Prices Are Determined Through Joint Bargaining

Author

Listed:
  • Keith Brand
  • Christopher V. Lau

Abstract

We develop an upward pricing pressure metric for evaluating mergers when prices are negotiated through bilateral bargaining. Our framework is based on deriving the marginal cost reduction required to just offset a price increase due to a horizontal merger in a Nash‐in‐Nash bargaining equilibrium assuming suppliers negotiate with buyers using an all‐or‐nothing strategy. We assess the accuracy of our framework by applying it to a hospital merger setting, where we conduct Monte Carlo simulations and compare to observed price changes from consummated mergers. We find that our metric offers important advantages over alternative methods and only requires information that is readily available in merger investigations.

Suggested Citation

  • Keith Brand & Christopher V. Lau, 2025. "Upward Pricing Pressure in Mergers Where Prices Are Determined Through Joint Bargaining," Journal of Industrial Economics, Wiley Blackwell, vol. 73(4), pages 523-539, December.
    • Handle: RePEc:bla:jindec:v:73:y:2025:i:4:p:523-539
    DOI: 10.1111/joie.70002
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/joie.70002
    Download Restriction: no
    File URL: https://libkey.io/10.1111/joie.70002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:jindec:v:73:y:2025:i:4:p:523-539. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.