Post-merger Price Dynamics Matters, So Why Do Merger Retrospectives Ignore It?

Franco Mariuzzo () and Peter L. Ormosi ()
Additional contact information
Franco Mariuzzo: University of East Anglia
Peter L. Ormosi: University of East Anglia

Review of Industrial Organization, 2019, vol. 55, issue 3, No 4, 403-429

Abstract: Abstract The overwhelming majority of retrospective merger studies pool the post-merger data to estimate the average price effect of the merger. Pooled post-merger estimates ignore key information about price dynamics and are unable to identify if post-merger prices revert to pre-merger levels within the same time period. We provide evidence—from a meta-analysis of over 600 previous market-level price effect estimates, and a set of Monte Carlo experiments—that using pooled models often leads to erroneous conclusions: for example by wrongly concluding that the merger increased prices, even when this price increase was only temporary.

Keywords: Mergers; Merger retrospectives; Meta study; Monte Carlo simulations; C51; K21; L49 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://link.springer.com/10.1007/s11151-019-09719-0 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
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:kap:revind:v:55:y:2019:i:3:d:10.1007_s11151-019-09719-0

Ordering information: This journal article can be ordered from
http://www.springer. ... on/journal/11151/PS2

DOI: 10.1007/s11151-019-09719-0

Access Statistics for this article

Review of Industrial Organization is currently edited by L.J. White

More articles in Review of Industrial Organization from Springer, The Industrial Organization Society Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().