Nonprice Effects of Mergers: Issues and Evidence. (June 2018)

• Record Type: Journal Article
• Authors: Kwoka, John; Kilpatrick, Shawn
• Other Names: Gundlach Gregory T. guest-editor.; Moss Diana guest-editor.
• Is Part Of: Antitrust bulletin. Volume 63:Number 2(2018)
• Page Start: 169
• Page End: 182
• Publication Date: 2018-06
• Subjects: mergers -- nonprice effects -- merger retrospectives -- antitrust policy; Antitrust law -- United States -- Periodicals; Restraint of trade -- United States -- Periodicals; 343.73072105
• DOI: 10.1177/0003603X18771756
• Languages: English
• ISSNs: 0003-603X

Abstract

Antitrust analysis of mergers focuses heavily—some would say, almost exclusively—on price effects. That focus does not reflect the lesser importance of quality, variety, cost, and technological progressiveness in mergers, but rather reflects better analytical tools and predictions for price effects. This article first provides an overview of the distinctive, often problematic, issues raised in evaluating nonprice effects. It then surveys the available empirical evidence on these from merger retrospectives. The evidence suggests that mergers on average may not cause either significant improvements or significant harms in terms of nonprice outcomes. While that might seem to suggest that policy need not be unduly concerned with nonprice effects, sufficient data do not exist for statistical testing. Moreover, variation in the average effects appears large, so that in particular cases nonprice concerns may dominate.