On the Price Effects of Horizontal Mergers: A Theoretical Interpretation

Posted by D. Daniel Sokol

Emilie Dargaud (Universite de la Reunion) and Carlo Reggiani (University of Manchester) provide comments On the Price Effects of Horizontal Mergers: A Theoretical Interpretation.

ABSTRACT: Horizontal mergers are usually under the scrutiny of antitrust au- thorities due to their potential undesirable e¤ects on prices and con- sumer surplus. Ex-post evidence, however, suggests that not always these e¤ects take place and even relevant mergers may end up hav- ing negligible price e¤ects. The analysis of mergers in the context of non-localized spatial competition offers a further explanation of that evidence: in this framework both positive and zero price e¤ects are possible outcomes of the merger activity.