They Played the Merger Game: A Retrospective Analysis in the UK Videogames Market

44 Pages Posted: 4 Oct 2013

See all articles by Luca Aguzzoni

Luca Aguzzoni

European Union - Directorate General for Competition

Elena Argentesi

University of Bologna - Department of Economics

Paolo Buccirossi

Laboratorio di economia, antitrust, regolamentazione (LEAR)

Lorenzo Ciari

European Bank for Reconstruction and Development (EBRD)

Tomaso Duso

German Institute for Economic Research (DIW Berlin); TU Berlin- Faculty of Economics and Management - Empirical Industrial Organization

Massimo Tognoni

UK Competition Commission

Cristina Vitale

Organization for Economic Co-Operation and Development (OECD)

Multiple version iconThere are 2 versions of this paper

Date Written: September 2013

Abstract

We study the effect of a merger in a dynamic high-technology industry -- the videogame market -- which is characterized by frequent introduction of new products. To assess the impact of the merger between two large specialist retailers in the UK, we perform a difference-in-differences analysis comparing the price evolution of the merging parties to that of their 7 major competitors on an original sample of 196 videogames belonging to six different consoles. The results of our econometric analyses suggest that there has been a reduction in the general level of prices of both new and pre-owned games after the merger. This decline has been more marked for the merging parties, which suggests that the merger between Game and Gamestation did not lead to a substantial lessening of competition; rather it is consistent with the existence of efficiency gains.

Keywords: Mergers, ex-post evaluation, videogames market, retail sector

JEL Classification: K21, L24, L44, D22, O32

Suggested Citation

Aguzzoni, Luca and Argentesi, Elena and Buccirossi, Paolo and Ciari, Lorenzo and Duso, Tomaso and Tognoni, Massimo and Vitale, Cristina, They Played the Merger Game: A Retrospective Analysis in the UK Videogames Market (September 2013). DIW Berlin Discussion Paper No. 1330. Available at SSRN: https://ssrn.com/abstract=2335954 or http://dx.doi.org/10.2139/ssrn.2335954

Luca Aguzzoni

European Union - Directorate General for Competition ( email )

Place Madou, Madouplein 1
Saint-Josse-ten-Noode/Sint-Joost-ten-Noode
Brussels, B-1049
Belgium

Elena Argentesi (Contact Author)

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, BO 40141
Italy
+39 051 209 8661 (Phone)
+39 051 209 8040 (Fax)

HOME PAGE: http://www2.dse.unibo.it/argentes/

Paolo Buccirossi

Laboratorio di economia, antitrust, regolamentazione (LEAR) ( email )

Via di Monserrato 48
Rome, 00186
Italy
+39 066 830 0530 (Phone)

Lorenzo Ciari

European Bank for Reconstruction and Development (EBRD) ( email )

One Exchange Square
London, EC2A 2EH
United Kingdom

Tomaso Duso

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

TU Berlin- Faculty of Economics and Management - Empirical Industrial Organization ( email )

Berlin, 10585
Germany

Massimo Tognoni

UK Competition Commission ( email )

Victoria House
Southampton Row
London, WC1B 4AD
United Kingdom

Cristina Vitale

Organization for Economic Co-Operation and Development (OECD) ( email )

2 rue Andre Pascal
Paris Cedex 16, 75775
France

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