Concentration Screens for Horizontal Mergers

Volker Nocke and Michael D. Whinston

No 14979, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: 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 empirical basis for focusing solely on the change in the Herfindahl index, and ignoring its level, in screening mergers for whether their unilateral effects will harm consumers. We also argue, again both theoretically and empirically, that the levels at which the presumptions currently are set may be too lax, especially with regards to safe harbors.

Keywords: Horizontal merger; Oligopoly; Herfindahl index; Market concentration; market power (search for similar items in EconPapers)
JEL-codes: D43 L13 L40 (search for similar items in EconPapers)
Date: 2020-07
New Economics Papers: this item is included in nep-com
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Citations: View citations in EconPapers (13)

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Related works:
Working Paper: Concentration Screens for Horizontal Mergers (2020)
Working Paper: Concentration Screens for Horizontal Mergers (2020)
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