EconPapers    
Economics at your fingertips  
 

Bridging Quasi-Experimental and Structural Approaches for Robust Evaluation of US Airline Mergers

Gaurab Aryal, Anirban Chattopadhyaya and Federico Ciliberto

Papers from arXiv.org

Abstract: We bridge quasi-experimental and structural approaches to develop a robust method for retrospective merger evaluation. First, we show that the standard difference-in-differences estimation equation can be interpreted as a "reduced form" of our structural equations, formally $\textit{bridging}$ these methodologies. Demand and cost parameters enable the construction of a robust measure of the merger price effect that remains identified even when the difference-in-differences approach is not, and can be decomposed into efficiency gains versus conduct changes among the remaining firms. Second, we enhance the structural approach by weighting each market's contribution to the moment conditions using market- and time-specific synthetic weights when the number of treated markets is limited. Applying this methodology to three major airline mergers, we find that modest efficiency gains are entirely offset by increased coordination, particularly in later mergers. The $\textit{synthetic GMM}$ refinement sharpens these findings, uncovering anti-competitive effects that standard approaches miss.

Date: 2025-03, Revised 2025-09
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2503.15785 Latest version (application/pdf)

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:arx:papers:2503.15785

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().

 
Page updated 2025-10-04
Handle: RePEc:arx:papers:2503.15785