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A Treatment Effect Method for Merger Analysis with an Application to Parking Prices in Paris

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  • Philippe Choné
  • Laurent Linnemer

Abstract

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.

Suggested Citation

  • Philippe Choné & Laurent Linnemer, 2010. "A Treatment Effect Method for Merger Analysis with an Application to Parking Prices in Paris," CESifo Working Paper Series 3268, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_3268
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp3268.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. Borenstein, Severin, 1990. "Airline Mergers, Airport Dominance, and Market Power," American Economic Review, American Economic Association, vol. 80(2), pages 400-404, May.
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    Cited by:

    1. Inci, Eren & Lindsey, Robin, 2015. "Garage and curbside parking competition with search congestion," Regional Science and Urban Economics, Elsevier, vol. 54(C), pages 49-59.
    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 hal-00920460, HAL.
    3. Elena Argentesi & Albert Banal-Estañol & Jo Seldeslachts & Meagan Andrews, 2017. " A retrospective evaluation of the GDF/Suez merger: Effects on gas hub prices," Working Papers Department of Managerial Economics, Strategy and Innovation (MSI) 582764, KU Leuven, Faculty of Economics and Business, Department of Managerial Economics, Strategy and Innovation (MSI).
    4. Gergely Csorba & Zoltan Papai, 2015. "Does one more or one less mobile operator affect prices? A comprehensive ex-post evaluation of entries and mergers in European mobile telecommunication markets," IEHAS Discussion Papers 1541, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    5. Gergely Csorba & Gabor Koltay & David Farkas, 2011. "Separating the ex post effects of mergers: an analysis of structural changes on the Hungarian retail gasoline market," IEHAS Discussion Papers 1118, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    6. Csorba, Gergely & Pápai, Zoltán, 2013. "Does one more or one less mobile opertor affect prices? A comprehensive ex-post evaluation of entries and mergers in European mobile telecommunication markets," 24th European Regional ITS Conference, Florence 2013 88503, International Telecommunications Society (ITS).
    7. Luca Aguzzoni & Elena Argentesi & Lorenzo Ciari & Tomaso Duso & Massimo Tognoni, 2016. "Ex post Merger Evaluation in the U.K. Retail Market for Books," Journal of Industrial Economics, Wiley Blackwell, vol. 64(1), pages 170-200, March.
    8. Orley Ashenfelter & Daniel Hosken & Matthew Weinberg, 2014. "Did Robert Bork Understate the Competitive Impact of Mergers? Evidence from Consummated Mergers," Journal of Law and Economics, University of Chicago Press, vol. 57(S3), pages 67-100.
    9. repec:kap:decono:v:166:y:2018:i:1:d:10.1007_s10645-017-9308-5 is not listed on IDEAS
    10. Gugler, Klaus & Szücs, Florian, 2016. "Merger externalities in oligopolistic markets," International Journal of Industrial Organization, Elsevier, vol. 47(C), pages 230-254.
    11. repec:eee:transa:v:101:y:2017:i:c:p:86-97 is not listed on IDEAS
    12. Inci, Eren, 2015. "A review of the economics of parking," Economics of Transportation, Elsevier, vol. 4(1), pages 50-63.

    More about this item

    Keywords

    merger retrospective analysis; treatment effect models;

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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