Elias Braunfels, Managing Partner at Oslo Economics in Berlin, will discuss his research on merger-price effects at the 40th annual conference of the European Associations of Law and Economics in Berlin on Thursday 21. September 2023.
Horizontal mergers in concentrated markets may reduce competition and harm consumers through higher prices, lower product quality, and less innovation. For this reason, mergers that impede effective competition are prohibited in most jurisdictions, and competition authorities often conduct ex-ante merger investigations of notified mergers. These investigations assess potential anti-competitive effects against potential pro-competitive efficiency gains and remedies proposed by the merging parties.
Ex-post evaluation of merger policy is an important tool for improving the understanding of merger effects and provide valuable feedback on both merger policy and the economic theory underlying it. Despite the apparent importance of the topic, there is little empirical evidence on the relative size of various channels for price effects of mergers.
The research provides new insights by empirically investigating and disentangling merger price effects through three channels – efficiency gains, remedies, and internalization of rivalry. To disentangle channels, we exploit product level differences in the applicability of each channel for an arguably exogenous merger in the Norwegian mobile telecommunications market. The results underline that mergers may have heterogeneous effects across affected products. This presents important feedback for merger control regarding the effectiveness of remedies and presence of efficiency gains.
More about this can be found in the working paper entitled “Efficiency Gains, Remedies, and Internalization of Rivalry: Product Level Evidence from a Mobile Telecom Merger” coauthored with Elias’ colleagues at Oslo Economics, Arne Gramstad and Jostein Skaar.
For more information on the European Associations of Law and Economics’ conference and its programme, please visit the conference site.
