A Treatment Effect Method for Merger Analysis with an Application to Parking Prices in Paris

21 Pages Posted: 5 Dec 2010

See all articles by Philippe Choné

Philippe Choné

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST); CESifo (Center for Economic Studies and Ifo Institute)

Laurent Linnemer

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST)

Date Written: November 30, 2010

Abstract

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.

Keywords: merger retrospective analysis, treatment effect models

JEL Classification: L10, L40

Suggested Citation

Choné, Philippe and Linnemer, Laurent, A Treatment Effect Method for Merger Analysis with an Application to Parking Prices in Paris (November 30, 2010). CESifo Working Paper Series No. 3268, Available at SSRN: https://ssrn.com/abstract=1719035 or http://dx.doi.org/10.2139/ssrn.1719035

Philippe Choné

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

15 Boulevard Gabriel Peri
Malakoff Cedex, 1 92245
France

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Laurent Linnemer (Contact Author)

National Institute of Statistics and Economic Studies (INSEE) - Center for Research in Economics and Statistics (CREST) ( email )

15 Boulevard Gabriel Peri
Malakoff Cedex, 1 92245
France

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