Multiproduct Mergers and Quality Competition

Justin Pappas Johnson and Andrew Rhodes ()

No 18-967, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: We investigate mergers in markets where quality dierences between products are central and rms may reposition their product lines by adding or removing products of dierent qualities following a merger. Such mergers are ma- terially dierent from those studied in the existing literature. Mergers without synergies may exhibit a product-mix eect which raises consumer surplus, but only when the pre-merger industry structure satises certain observable features. Post- merger synergies may lower consumer surplus. The level of, and changes in, the Herndahl-Hirschman Index may give a misleading assessment of how a merger aects consumers. A merger may benet some outsiders but harm others.

Date: 2018-11, Revised 2021-02
New Economics Papers: this item is included in nep-com, nep-ind and nep-mic
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Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Multiproduct mergers and quality competition (2021)
Working Paper: Multiproduct Mergers and Quality Competition (2021)
Working Paper: Multiproduct mergers and quality competition (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:33104

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