Merger Effects and Antitrust Enforcement: Evidence from US Consumer Packaged Goods
We document the effects of a comprehensive set of mergers of US consumer packaged goods manufacturers on prices, quantities, and product assortment. Across a range of specifications, we find a small average price effect of mergers (-0.6% to 1.6%) but substantial heterogeneity in effects, with a standard deviation between 5.3–6.7 pp. Through a model of enforcement, we find that agencies challenge mergers they expect would increase prices more than about 4%–8%. Modest increases in stringency would reduce prices and the prevalence of completed price-increasing mergers, with minimal impacts on blocked price-decreasing mergers, at a significantly greater agency burden.
Non-Technical Summaries
- Mergers can increase prices if the merging parties gain market power due to the deal. They can decrease prices if the union induces cost...
Related
More from the NBER
In addition to working papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals — the NBER Reporter, the NBER Digest, the Bulletin on Health, and the Bulletin on Entrepreneurship — as well as online conference reports, video lectures, and interviews.
