An Empirical Analysis of Mergers: Efficiency Gains and Impact on Consumer Prices

Céline Bonnet and Jan Philip Schain

No 17-765, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: In this article, we extend the literature on merger simulation models by incorporating its potential synergy gains into structural econometric analysis. We present a three-step integrated approach. We estimate a structural demand and supply model, as in Bonnet and Dubois (2010). This model allows us to recover the marginal cost of each differentiated product. Then we estimate potential efficiency gains using the Data Envelopment Analysis approach of Bogetoft and Wang (2005), and some assumptions about exogenous cost shifters. In the last step, we simulate the new price equilibrium post merger taking into account synergy gains, and derive price and welfare effects. We use a homescan dataset of dairy dessert purchases in France, and show that for two of the three mergers considered, synergy gains could offset the upward pressure on prices post. Some mergers could then be considered as not harmful for consumers.

Date: 2017-02
New Economics Papers: this item is included in nep-cmp, nep-com and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.tse-fr.eu/sites/default/files/TSE/docu ... /2017/wp_tse_765.pdf Full text (application/pdf)

Related works:
Journal Article: AN EMPIRICAL ANALYSIS OF MERGERS: EFFICIENCY GAINS AND IMPACT ON CONSUMER PRICES (2020)
Working Paper: An Empirical Analysis of Mergers: Efficiency Gains and Impact on Consumer Prices (2020)
Working Paper: An empirical analysis of mergers: Efficiency gains and impact on consumer prices (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:tse:wpaper:31503

Access Statistics for this paper

More papers in TSE Working Papers from Toulouse School of Economics (TSE) Contact information at EDIRC.
Bibliographic data for series maintained by ().