There may be no pass through of a merger-related cost efficiency

Joseph E. Harrington

Economics Letters, 2021, vol. 208, issue C

Abstract: When it is uncertain that a merger will have a cost-reducing efficiency and, should it materialize, the efficiency is private information to the merged firm, equilibrium prices may be at a level corresponding to the absence of the efficiency. In that case, none of the efficiency is passed to consumers.

Keywords: Merger; Efficiency; Pass through (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:208:y:2021:i:c:s016517652100327x

DOI: 10.1016/j.econlet.2021.110050

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