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Ex-Post Merger Evaluation in the UK Retail Market for Books

Listed author(s):
  • Luca Aguzzoni
  • Elena Argentesi
  • Lorenzo Ciari
  • Tomaso Duso
  • Massimo Tognoni

This paper empirically evaluates the price effects of the merger of two major book retail chains in the UK: Waterstone's and Ottakar's. We employ differences-in-differences techniques and use a rich dataset containing monthly scanner data information on a sample of 200 books sold in 60 stores in 50 different local markets for a period of four years around the merger. Since retail mergers may have either local or national effects (or both) according to the level at which retail chains set prices, we undertake an ex-post assessment of the impact of the merger at both levels. At the local level, we compare the changes in the average price charged before and after the merger in the shops located in overlap areas -i.e. areas where both chains were present before the merger- and in non-overlap areas -i.e. areas where only one chain was present before the merger. At the national level, we employ two distinct control groups to evaluate the merger, namely the competitors and the top-selling titles. We find that the merger did not result in an increase in prices either at the local or at the national level. We also perform heterogeneous treatment effects estimations in order to assess whether the effect of the merger differs along various dimensions of heterogeneity that are present in our data.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.424381.de/dp1310.pdf
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1310.

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Length: 65 p.
Date of creation: 2013
Handle: RePEc:diw:diwwpp:dp1310
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  5. Michel Clement & Dennis Proppe & Armin Rott, 2007. "Do Critics Make Bestsellers? Opinion Leaders and the Success of Books," Journal of Media Economics, Taylor & Francis Journals, vol. 20(2), pages 77-105.
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  12. Romahn, André & Friberg, Richard, 2012. "Ex-Post Merger Review and Divestitures," IESE Research Papers D/1056, IESE Business School.
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  22. repec:pri:cepsud:183ashenfelter is not listed on IDEAS
  23. Alan T. Sorensen, 2007. "BESTSELLER LISTS AND PRODUCT VARIETY -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 55(4), pages 715-738, December.
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