A Treatment Effect Method for Merger Analysis with an Application to Parking Prices in Paris
National Institute of Statistics and Economic Studies (INSEE); CESifo (Center for Economic Studies and Ifo Institute)
National Institute of Statistics and Economic Studies (INSEE) - Laboratory of Industrial Economics; CESifo (Center for Economic Studies and Ifo Institute)
November 30, 2010
CESifo Working Paper Series No. 3268
Most retrospective merger studies resort to the treatment effect approach, comparing the price dynamics in a treatment group and in a control group. We propose a systematic method to construct the groups, which applies to any industry with spatial competition. The method is consistent with the fact that mergers alter oligopolistic equilibria in complex ways, and thus that seemingly distant entities may be affected through indirect channels. An illustration based on a merger in the Parisian parking market is provided.
Number of Pages in PDF File: 21
Keywords: merger retrospective analysis, treatment effect models
JEL Classification: L10, L40
Date posted: December 5, 2010
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