Concentration Thresholds for Horizontal Mergers
<jats:p> Concentration-based thresholds for horizontal mergers, such as those in the US Horizontal Merger Guidelines, play a central role in merger analysis but their basis remains unclear. We show that there is both a theoretical and an empirical basis for focusing solely on the change in con...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Article |
| Language: | English |
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American Economic Association
2022
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| Online Access: | https://hdl.handle.net/1721.1/144256 |
| _version_ | 1826195560082702336 |
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| author | Nocke, Volker Whinston, Michael D |
| author2 | Massachusetts Institute of Technology. Department of Economics |
| author_facet | Massachusetts Institute of Technology. Department of Economics Nocke, Volker Whinston, Michael D |
| author_sort | Nocke, Volker |
| collection | MIT |
| description | <jats:p> Concentration-based thresholds for horizontal mergers, such as those in the US Horizontal Merger Guidelines, play a central role in merger analysis but their basis remains unclear. We show that there is both a theoretical and an empirical basis for focusing solely on the change in concentration, and ignoring its level, in screening mergers for whether their unilateral price effects will harm consumers. We also argue that current threshold levels likely are too lax, unless one expects efficiency gains of 5 percent or greater, or other factors such as entry and product repositioning to significantly constrain the exercise of market power postmerger. (JEL D43, G34, G38, K21, L13, L41) </jats:p> |
| first_indexed | 2024-09-23T10:14:38Z |
| format | Article |
| id | mit-1721.1/144256 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T10:14:38Z |
| publishDate | 2022 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | mit-1721.1/1442562023-04-18T19:47:42Z Concentration Thresholds for Horizontal Mergers Nocke, Volker Whinston, Michael D Massachusetts Institute of Technology. Department of Economics Sloan School of Management <jats:p> Concentration-based thresholds for horizontal mergers, such as those in the US Horizontal Merger Guidelines, play a central role in merger analysis but their basis remains unclear. We show that there is both a theoretical and an empirical basis for focusing solely on the change in concentration, and ignoring its level, in screening mergers for whether their unilateral price effects will harm consumers. We also argue that current threshold levels likely are too lax, unless one expects efficiency gains of 5 percent or greater, or other factors such as entry and product repositioning to significantly constrain the exercise of market power postmerger. (JEL D43, G34, G38, K21, L13, L41) </jats:p> 2022-08-05T18:39:38Z 2022-08-05T18:39:38Z 2022-06-01 2022-08-05T18:26:45Z Article http://purl.org/eprint/type/JournalArticle https://hdl.handle.net/1721.1/144256 Nocke, Volker and Whinston, Michael D. 2022. "Concentration Thresholds for Horizontal Mergers." American Economic Review, 112 (6). en 10.1257/aer.20201038 American Economic Review Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf American Economic Association American Economic Association |
| spellingShingle | Nocke, Volker Whinston, Michael D Concentration Thresholds for Horizontal Mergers |
| title | Concentration Thresholds for Horizontal Mergers |
| title_full | Concentration Thresholds for Horizontal Mergers |
| title_fullStr | Concentration Thresholds for Horizontal Mergers |
| title_full_unstemmed | Concentration Thresholds for Horizontal Mergers |
| title_short | Concentration Thresholds for Horizontal Mergers |
| title_sort | concentration thresholds for horizontal mergers |
| url | https://hdl.handle.net/1721.1/144256 |
| work_keys_str_mv | AT nockevolker concentrationthresholdsforhorizontalmergers AT whinstonmichaeld concentrationthresholdsforhorizontalmergers |