The critical loss test proposed by Barry Harris and Joseph Simons has become popular in helping define U.S. antitrust markets. The test commonly leads to large, inclusive markets. We show that it is problematic, for several reasons.

Antiturst enforcement agencies and courts use net effect on price as a touchstone for the legality of mergers. This paper derives a simple, and completely general, condition for implementing that standard when industry equilibrium is static Nash in qualities (Cournot).

This essay is a status report on the development of a new approach to analysis of mergers. This approach replaces market-share- based presemptions with simulations of the effects of mergers within the context of tractable oligopoly models calibrated to the particular characteristics of the...

This paper investigates the properties of four demand systems that have been used to predict the effects of differentiated products mergers: the Almost Ideal demand System (AIDS), logit, linear, and log-linear (constant elasticity).

The research assesses how the two Big Eight mergers of 1989 affected the market for audit services. A data set of 1,978 firms over a 12-year period is used to test four theories of how the mergers could have affected competition and consumer welfare. The study finds that the mergers reduced the...

An anticompetitive horizontal merger creats an opportunity for entry, which might deter or counteract the competitive effects of concern. This paper analyzes mergers in randomly generated Cournot and Bertrand Industries to ascertain the incremental effect of the mergers on the profitability of...