Merger Retrospective Studies: A Review

Posted by D. Daniel Sokol

A team of economists from NERA, Graeme Hunter, Gregory K. Leonard, and G. Steven Olley have a great (and relatively short) piece on Merger Retrospective Studies: A Review.

ABSTRACT: The debate concerning whether the antitrust agencies under the Bush administration were lax with respect to merger review has led to a call to evaluate retrospectively the competitive effects of consummated mergers. Such information would help assess whether enforcement thresholds have been set too high or too low. In this article from Antitrust magazine, NERA Vice President Dr. Graeme Hunter, Senior Vice President Dr. Gregory K. Leonard, and Vice President Dr. G. Steven Olley review various merger retrospective studies that have appeared since 1990. These studies often employed the "differences-in-differences" econometric approach. While a majority of the studies found that prices increased post-merger, a significant minority found no price increase.