Merger effects with product complementarity: Evidence from Colombia’s telecommunications

Juan Vélez-Velásquez

Information Economics and Policy, 2019, vol. 49, issue C

Abstract: Mergers of firms producing complementary products entail two opposing effects: Lower prices, because they may internalize the impact of the complementarity, and higher prices, because the firms gain the ability to price discriminate. I use Colombian data to analyze mergers between firms providing complementary telecommunication services. I estimate a discrete choice model of demand for bundled fixed-line and mobile internet services, in which the degree of either substitutability or complementarity among products is a parameter of interest. Counterfactual experiments using the estimated model indicate pro-competitive effects of mergers with complements: despite a small increase in the price of standalone goods, consumer surplus increases.

Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167624518301033
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Merger Effects with Product Complementarity: Evidence from Colombia’s Telecommunications (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:49:y:2019:i:c:s0167624518301033

DOI: 10.1016/j.infoecopol.2019.100831

Access Statistics for this article

Information Economics and Policy is currently edited by D. Waterman

More articles in Information Economics and Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().