A Treatment Effect Method for Merger Analysis with an Application to Parking Prices in Paris
Most retrospective merger studies resort to the treatment effect approach, comparing the price dynamics in a treatment group and in a control group. We propose a systematic method to construct the groups, which applies to any industry with spatial competition. The method is consistent with the fact that mergers alter oligopolistic equilibria in complex ways, and thus that seemingly distant entities may be affected through indirect channels. An illustration based on a merger in the Parisian parking market is provided.
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- Froeb, Luke & Tschantz, Steven & Crooke, Philip, 2003. "Bertrand competition with capacity constraints: mergers among parking lots," Journal of Econometrics, Elsevier, vol. 113(1), pages 49-67, March.
- Borenstein, Severin, 1990. "Airline Mergers, Airport Dominance, and Market Power," American Economic Review, American Economic Association, vol. 80(2), pages 400-404, May.