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Analyzing Mergers Using Capacity Closures

Author

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  • Nicholas Hill

    (Economic Analysis Group, Antitrust Division, Department of Justice)

Abstract

In this paper I describe a method for analyzing mergers in industries in which it is more cost effective to close capacity than to idle it. The method can be used to define markets, to assess the likelihood of competitive effects and to evaluate divestitures. I also discuss the method’s data requirements and how it can be modified to deal with the types of issues that often arise during an antitrust investigation.

Suggested Citation

  • Nicholas Hill, 2008. "Analyzing Mergers Using Capacity Closures," EAG Discussions Papers 200808, Department of Justice, Antitrust Division.
    • Handle: RePEc:doj:eagpap:200808
    as

    Download full text from publisher

    File URL: https://www.justice.gov/atr/public/eag/236664.pdf
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    Citations

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    Cited by:

    1. Nathan H. Miller & Gloria Sheu, 2021. "Quantitative Methods for Evaluating the Unilateral Effects of Mergers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 58(1), pages 143-177, February.
    2. Ken Heyer & Nicholas Hill, 2008. "The Year in Review: Economics at the Antitrust Division, 2007–2008," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 33(3), pages 247-262, November.

    More about this item

    Keywords

    Merger; Capacity; Competition; Antitrust; Critical Loss;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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