Merger Effects and Antitrust Enforcement: Evidence from US Consumer Packaged Goods

Vivek Bhattacharya, Gastón Illanes and David Stillerman

No 31123, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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.

JEL-codes: D43 K21 L13 L41 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-com, nep-ind, nep-reg and nep-ure
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