We study the welfare effects of a merger between ad-funded platforms facing elastic consumer demand. We show that advertising fees as well as quality investment levels by the platforms fall post-merger. Interestingly, despite the lower advertising fees, advertisers may be worse off when their...

This comprehensive review of ex-post merger studies assesses the price effects of horizontal transactions to determine whether there are common post-merger price effects, both overall and in specific markets. The aim is to derive implications for policy makers and competition authorities in...

The legality of a horizontal merger under section 7 of the Clayton Act turns on a reckoning of its social costs and benefits. This paper reviews what economics has to say about that reckoning and explores the relationship between economic learning and merger law and policy

We introduce knowledge spillovers in a model of innovation competition à la Federico et al. (2017) and Denicolò and Polo (2018), which otherwise features horizontal mergers that harm innovation due to the business stealing effect. With knowledge spillovers, competition discourages investment...

This study examines how antitrust law adoptions affect horizontal merger and acquisition (M&A) outcomes. Using the staggered introduction of competition laws in 20 countries, we find antitrust regulation decreases acquirers’ five-day cumulative abnormal returns surrounding horizontal merger...

We re-examine the “buyer power” defense to horizontal mergers using models of imperfect competition in which input prices are set before goods prices. We derive a measure of unilateral incentives to adjust input prices after a downstream merger, Input Pricing Pressure, and we use it to show...

We consider mergers between multi-product firms in a market with monopolistically competitive fringe of single-product firms. Aggregate product variety is determined by product variety choices of multi-product firms and entry/exit decisions of single-product firms. Mergers can generate marginal...

I find on average firms respond to a horizontal merger by investing less in PP&E, labor, and R&D. There is notable heterogeneity among the non-merging rivals. The laggard rivals reduce investments in PP&E, labor, and R&D while the neck-and-neck rivals do the opposite. There is an insignificant...

We analyze the profitability of horizontal mergers in Cournot markets, where firms are divided into two groups based on the extent to which their products are differentiated. We show that both within-group and cross-group mergers are more likely to occur when either products are more distant...

The ultimate goal of antitrust enforcement is to maximize the surplus consumers enjoy by enhancing production efficiency and eliminating market power. Previous literature focuses on the average net wealth effects on merging firms and their stakeholder firms and reports evidence of efficiency...

This paper examines the output and profit effects of horizontal mergers between upstream firms in intermediate goods markets. We consider market settings in which the upstream firms sell differentiated products to, and negotiate nonlinear supply contracts with, a downstream retail monopolist. If...

We consider mergers between multi-product firms in a market with monopolistically competitive fringe of single-product firms. Aggregate product variety is determined by product variety choices of multi-product firms and entry/exit decisions of single-product firms. Mergers can generate marginal...

Concentration-based screens for horizontal mergers, such as those employed in the US DOJ and FTC Horizontal Merger Guidelines, play a central role in merger analysis. However, the basis for these screens, in both form and level, remains unclear. We show that there is both a theoretical and an...

We examine integration strategies of multinational firms that face a rich array of choices of international organization. Each firm in an industry must provide headquarter services from its home country, produce intermediate inputs, and assemble the intermediate goods into final products. Both...

While the possibility of algorithmic price discrimination and algorithmic collusion has been extensively discussed in the global antitrust community in recent years, there has been much more limited discussion in the context of mergers. In this article, we aim to fill this gap by discussing some...

We introduce knowledge spillovers in a model of innovation competition a la Federico et al. (2017) and Denicolo and Polo (2018), which otherwise features horizontal mergers that harm innovation due to the business stealing effect. With knowledge spillovers, competition discourages investment in...

The rise of unilateral effects analysis has significantly increased the importance of presenting a comprehensive review of the efficiencies relevant to a potentially problematic merger. Although numerous articles address efficiencies from a theoretical point of view, few practical commentaries...

This paper investigates the effects of mergers on the product mix of multiproduct firms. Thus, we open the black box of post-merger efficiency improvements to reveal a new margin of adjustment along the product dimension. We analyze horizontal mergers in a theoretical model where oligopolistic...

This paper investigates the effects of mergers on the product mix of multiproduct firms. Thus, we open the black box of post-merger efficiency improvements to reveal a new margin of adjustment along the product dimension. We analyze horizontal mergers in a theoretical model where oligopolistic...

This Comment is written in response to DOJ-FTC Request for Information on Merger Enforcement. We explain that the use of pricing algorithms based on artificial intelligence methodologies (hereinafter: "pricing algorithms"), by one or both parties, should be taken into account in the merger...