Price Effects in U.S. Merger Retrospectives: A Meta-Analytic Approach

Abstract

We conduct a meta-analysis of U.S. merger retrospectives, a large and growing literature that investigates ex post merger outcomes—typically price—through reduced-form methods. We first document that mergers studied are unrepresentative of the universe of U.S. mergers but are observably similar to mergers that receive antitrust scrutiny. We then synthesize the literature by computing a summary price effect using a Bayesian hierarchical model. For the subset of papers in our sample that estimate log-price effects, we find a mean price increase of 7.06%. We also develop a new meta-analytic approach that allows us to combine and analyze different outcomes affected by mergers. Using this methodology, for the entire sample of papers that study price, we find that anticompetitive outcomes are 1.7 times more likely than procompetitive outcomes. We also find that price effects are higher for healthcare and airline mergers.

We maintain a companion website (https://www.mergermeta.com/) tracking developments in the merger retrospective literature and welcome submissions of new results.

Keywords: meta-analysis, merger retrospective, Bayesian hierarchical model, antitrust

JEL Classification: D43, L13, L41, C11