On the Price Effects of Horizontal Mergers: A Theoretical Interpretation

Dargaud, Emilie; Reggiani, Carlo

doi:10.2139/ssrn.2109149

On the Price Effects of Horizontal Mergers: A Theoretical Interpretation

GATE Working Paper No. 1222

34 Pages Posted: 17 Jul 2012

Emilie Dargaud

French National Center for Scientific Research (CNRS) - Institute of Economic Theory and Analysis (GATE); Université de la Réunion; University of Lyon 2

Carlo Reggiani

University of Manchester

There are 2 versions of this paper

Date Written: July 16, 2012

Abstract

Horizontal mergers are usually under the scrutiny of antitrust authorities due to their potential undesirable effects on prices and consumer surplus. Ex-post evidence, however, suggests that not always these effects take place and even relevant mergers may end up having negligible price effects. The analysis of mergers in the context of non-localized spatial competition may offer a further interpretation to the ones proposed in the literature: in this framework both positive and zero price effects are possible outcomes of the merger activity.

Keywords: horizontal mergers, price effects, spokes model

JEL Classification: D43, L11, L13

Suggested Citation: Suggested Citation

Dargaud, Emilie and Reggiani, Carlo, On the Price Effects of Horizontal Mergers: A Theoretical Interpretation (July 16, 2012). GATE Working Paper No. 1222. Available at SSRN: https://ssrn.com/abstract=2109149 or http://dx.doi.org/10.2139/ssrn.2109149