Why Event Studies Do Not Detect Anti-Competitive Mergers

Sven-Olof Fridolfsson and Johan Stennek
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Johan Stennek: The Research Institute of Industrial Economics, Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden

No 542, Working Paper Series from Research Institute of Industrial Economics

Abstract: Anticompetitive mergers increase competitors' profits, since they reduce competition. Using a model of endogenous mergers, we show that such mergers nevertheless may reduce the competitors' share-prices. Thus, event-studies can not detect anti-competitive mergers.

Keywords: Mergers & Acquisitions; Event Studies; Antitrust; Coalition Formation (search for similar items in EconPapers)
JEL-codes: G14 G34 L12 L41 (search for similar items in EconPapers)
Pages: 8 pages
Date: 2000-12-14
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0542

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