The entry-inducing effects of horizontal mergers: an exploratory analysis

Article Abstract:

Antitrust laws presume that the entry of new businesses into an industry would effectively constrain the anticompetitive impact of mergers within that industry. However, this assumption has an erroneous basis. It does not take into consideration the steep cost barriers new entrants' encounter. Even if a monopoly indulges in opportunistic price hikes that motivate a start-up business to lure the former's clients through lower priced commodities, the amount of investments needed to enter the industry is sufficient discouragement for this move.

Analysis, Interpretation and construction, Competition (Economics), Antitrust law, Venture capital, New business enterprises, Startups, Barriers to entry (Industrial organization), Barriers to entry

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A robust test for consumer welfare enhancing mergers among sellers of differentiated products

Article Abstract:

Some tools were recently developed to forecast the price effects of differentiated products mergers. However, these require the assumption of a certain functional form for industry demand which are vulnerable to attack. A study showed that marginal cost reductions that are needed in restoring premerger prices can be calculated even without any assumption about demand. A robust and practical method for realizing whether a certain merger promoted consumer welfare is likewise presented.

Consumer protection

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Horizontal mergers in spatially differentiated noncooperative markets

Article Abstract:

A Cournot-Nash model describing horizontal integration between companies involved with spatial price discrimination is examined. The model assumes continuity with the Merger Guidelines of the US Dept of Justice. Results show that the merger generates an approximate measure of increases in equilibrium, post-merger delivered prices and does not present a post-merger HHI estimate to describe integration.

Laws, regulations and rules, United States. Department of Justice, Horizontal integration, Price discrimination

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