A Large-Scale Evaluation of Merger Simulations

Vivek Bhattacharya, Gastón Illanes, Avner Kreps, José D. Salas and David Stillerman

No 35473, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Prospective merger simulations are a commonly used tool in industrial organization and antitrust, but evidence about their accuracy and predictive ability is limited. We study 101 mergers in consumer packaged goods and compare the realizations of price changes with predictions from merger simulations. In our sample of consummated mergers, predicted price changes from merger simulations are typically larger than realized ones. Despite the overprediction, we find that full merger simulations are more effective than both structural presumptions and approximations of the merger effect at identifying mergers with large price changes.

JEL-codes: D43 K21 L13 L41 (search for similar items in EconPapers)
Date: 2026-07
Note: IO
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