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ON THE PRICE EFFECTS OF HORIZONTAL MERGERS: A THEORETICAL INTERPRETATION

Authors

  • Emilie Dargaud,

    Corresponding author
    1. University of Lyon, Lyon, and CNRS, GATE Lyon St Etienne, Ecully, France
    • Correspondence: Carlo Reggiani, School of Social Sciences – Economics, University of Manchester, Manchester M13 9PL United Kingdom. Tel: +44 (0) 161 2754516; e-mail: carlo.reggiani@manchester.ac.uk. We would like to thank John Bone, Stefania Borla, Ramon Caminal, Bipasa Datta, Norman Ireland, Peter Simmons and two anonymous referees for precious comments and feedback.

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  • Carlo Reggiani

    1. School of Social Sciences - Economics, University of Manchester, UK
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ABSTRACT

Horizontal mergers are usually under the scrutiny of antitrust authorities due to their potential undesirable effects on prices and consumer surplus. Ex-post evidence, however, suggests that these effects do not always take place and even relevant mergers may end up having negligible price effects. The analysis of mergers in the context of non-localized spatial competition may offer a further interpretation to the ones proposed in the literature: in this framework both positive and zero price effects are possible outcomes of the merger activity.

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