Assessing the Competitive Effects of a Merger: Empirical Analysis of Price Differences Across Markets and Natural Experiments

Abstract

The techniques used by the economic expert witnesses in FTC v. Whole Foods Market illustrate the sophistication and complexity of modern empirical merger analysis. In this issue of Antitrust, we explain the intuition behind these techniques and discuss how the results can be used to assess the competitive effects of a merger. Although these techniques are being used with increasing frequency, we note that whether they are likely to be useful and informative depends on the market at issue and the degree to which the empirical approach captures the key events and market dynamics that drive pricing in the real world.

Keywords: Antitrust, Merger Analysis, Natural Experiments

JEL Classification: L4