Antimerger Policy Under the Hart-Scott-Rodino Act: A Reexamination of the Market Power Hypothesis

28 Pages Posted: 19 Jun 2010

See all articles by B. Espen Eckbo

B. Espen Eckbo

Tuck School of Business at Dartmouth; European Corporate Governance Institute (ECGI)

Peggy Wier

affiliation not provided to SSRN

Date Written: April 1, 1985

Abstract

Enforcement powers granted under the 1978 Hart-Scott-Rodino Antitrust Improvements Act were intended to enhance the antitrust agencies' ability to select truly anticompetitive mergers for prosecution. For example, the HSR Act imposes automatic delays on proposed mergers, so that the agencies have time to consider the mergers' competitive effects before they are completed. Also, it provides the agencies with the legal right to compel industry participants to reveal merger-related information during precomplaint investigations. Earlier studies by Eckbo (1983) and Stillman (1983) show that the HSR Act addressed a genuine problem: they conclude that the challenged horizontal mergers in their samples, which cover the 1963-78 period, were not anticompetitive. In this paper we test the proposition that the HSR Act has in fact produced a significant improvement in the agencies' case selection record. We reject this proposition and conclude instead that he merger cases in our sample that were filed after 1978 were mounted against mergers that apparently would not have harmed competition.

Keywords: Mergers, antitrust, market power, collusion, rival firms, industry rents

JEL Classification: D43, G34, G38, K21, L16, L41

Suggested Citation

Eckbo, B. Espen and Wier, Peggy, Antimerger Policy Under the Hart-Scott-Rodino Act: A Reexamination of the Market Power Hypothesis (April 1, 1985). Journal of Law and Economics, Vol. 28, pp. 119-149, 1985. Available at SSRN: https://ssrn.com/abstract=1626949

B. Espen Eckbo (Contact Author)

Tuck School of Business at Dartmouth ( email )

Hanover, NH 03755
United States
603-646-3953 (Phone)
603-646-3805 (Fax)

HOME PAGE: http://www.tuck.dartmouth.edu/eckbo

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

Peggy Wier

affiliation not provided to SSRN

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