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Evaluating the Evidence on Vertical Mergers

Author

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  • Marissa Beck

    (Charles River Associates)

  • Fiona Scott Morton

    (Yale School of Management)

Abstract

In theory, vertical mergers can have both procompetitive and anticompetitive effects. Many early empirical studies found benefits for vertical relationships; but the seminal surveys of this literature are now over a decade old. We review the empirical evidence from the last decade on vertical integration—as well as that in two frequently cited surveys from the mid-2000s. Taken as a whole, the empirical evidence as to the change in welfare that is due to vertical mergers is decidedly mixed, and should certainly not be used as a basis for a presumption that most vertical mergers are procompetitive or harmless.

Suggested Citation

  • Marissa Beck & Fiona Scott Morton, 2021. "Evaluating the Evidence on Vertical Mergers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(2), pages 273-302, September.
    • Handle: RePEc:kap:revind:v:59:y:2021:i:2:d:10.1007_s11151-021-09832-z
    DOI: 10.1007/s11151-021-09832-z
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    Cited by:

    1. Roger D. Blair, 2021. "The 2020 Vertical Merger Guidelines," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(2), pages 133-138, September.
    2. Gleb B. Domnenko & David S. Sibley, 2023. "Simulating Vertical Mergers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 62(2), pages 99-118, March.
    3. Michael A. Salinger, 2021. "The New Vertical Merger Guidelines: Muddying the Waters," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(2), pages 161-176, September.
    4. Brianna L. Alderman & Roger D. Blair, 2023. "Vertical integration to avoid monopsonistic exploitation," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 1824-1832, June.
    5. Haucap, Justus & Stiebale, Joel, 2023. "Non-price effects of mergers and acquisitions," DICE Discussion Papers 402, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    6. Tirza J. Angerhofer & Roger D. Blair, 2021. "Successive Monopoly, Bilateral Monopoly and Vertical Mergers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(2), pages 343-361, September.

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