Do Retail Mergers Affect Competition? Evidence from Grocery Retailing

Federal Trade Commission, Bureau of Economics, Working Paper No. 313

45 Pages Posted: 21 Dec 2012 Last revised: 6 Mar 2013

Daniel S. Hosken

Government of the United States of America - Federal Trade Commission

Luke Olson

Federal Trade Commission

Loren Smith

Government of the United States of America - Federal Trade Commission

Date Written: December 20, 2012

Abstract

This study estimates the price effects of horizontal mergers in the U.S. grocery retailing industry. We examine fourteen regions affected by mergers including both highly concentrated and relatively unconcentrated markets. We identify price effects by comparing markets affected by mergers to unaffected markets using both difference-in-difference estimation and the synthetic control method. Our results are robust to the choice of control group and estimation technique. We find that mergers in highly concentrated markets are most frequently associated with price increases, while mergers in less concentrated markets are most often associated with price decreases.

Keywords: Retailing, Supermarkets, Mergers

JEL Classification: K21, L11, L40, L81

Suggested Citation

Hosken, Daniel S. and Olson, Luke and Smith, Loren, Do Retail Mergers Affect Competition? Evidence from Grocery Retailing (December 20, 2012). Federal Trade Commission, Bureau of Economics, Working Paper No. 313. Available at SSRN: https://ssrn.com/abstract=2192189 or http://dx.doi.org/10.2139/ssrn.2192189

Daniel S. Hosken (Contact Author)

Government of the United States of America - Federal Trade Commission ( email )

600 Pennsylvania Ave., NW
Washington, DC 20580
United States

Luke Olson

Federal Trade Commission ( email )

600 Pennsylvania Avenue NW
Washington, DC 20580
United States

Loren Smith

Government of the United States of America - Federal Trade Commission ( email )

600 Pennsylvania Ave., NW
Washington, DC 20580
United States

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