Improving Economic Analysis in Merger Guidelines

Louis Kaplow

Journal of Economic Perspectives, 2025, vol. 39, issue 1, 29-52

Abstract: Merger review should reflect basic precepts of decision analysis, best practices in industrial organization economics, and teachings from related fields. Unfortunately, the analytical methods in modern merger guidelines fall short. Protocols violate standard prescriptions for information collection and decision-making, rely on a market definition paradigm that deviates significantly from core models of competitive interaction, fail to leverage central advances in understanding the efficiency consequences of mergers, and contravene or ignore fundamental dynamics relating to entry. This article elaborates correct analysis and contrasts it with that embodied in modern merger guidelines generally employed throughout the developed world, including the 2023 Merger Guidelines revision in the United States.

JEL-codes: G34 G38 K21 L40 N42 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1257/jep.20241413

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