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, comparingthe price dynamics in a treatment group and in a control group. We propose asystematic method to construct the groups, which applies to any industry with spatialcompetition. The method is consistent with the fact that mergers alter oligopolisticequilibria in complex ways, and thus that seemingly distant entities may be affectedthrough indirect channels. An illustration based on a merger in the Parisian parkingmarket is provided.
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- Borenstein, Severin, 1990. "Airline Mergers, Airport Dominance, and Market Power," American Economic Review, American Economic Association, vol. 80(2), pages 400-404, May.
- 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.