Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Monday, August 10, 2020

Concentration Screens for Horizontal Mergers

Concentration Screens for Horizontal Mergers
Volker Nocke and Michael D. Whinston #27533

Abstract:

Concentration-based screens for horizontal mergers, such as those employed in the US DOJ and FTC Horizontal Merger Guidelines, play a central role in merger analysis. However, the basis for these screens, in both form and level, remains unclear. We show that there is both a theoretical and an empirical basis for focusing solely on the change in the Herfindahl index, and ignoring its level, in screening mergers for whether their unilateral effects will harm consumers. We also argue, again both theoretically and empirically, that the levels at which the presumptions currently are set may allow mergers to proceed that cause consumer harm.

https://lawprofessors.typepad.com/antitrustprof_blog/2020/08/concentration-screens-for-horizontal-mergers.html

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