Merger control in differentiated product industries

Arbeitspapier

Thresholds defined on the level and change in the HHI (Herfindahl-Hirschmann Index) applied to market shares seem to be the main instrument to select notified mergers for investigation in both the EU and US. We question the use of such a selection rule in differentiated products industries. We propose the use of a structural approach to apply HHI thresholds based on profit shares rather than market shares. We illustrate our point using product data for Retail Carbonated Soft Drinks (Price, Market Share and Characteristics). We estimate company (product) mark-ups consistent with a structural model of equilibrium, using demand primitives from a Nested Logit model and a Random Coefficient model. We provide an example where the HHI thresholds based on profit shares identify potentially damaging mergers not captured by applying thresholds to output shares, or conversely, identify mergers of no concern that would be selected on the basis of output shares.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Centre for Economic Research Working Paper Series ; No. WP05/08

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Firm Performance: Size, Diversification, and Scope ; Antitrust Issues and Policies: General ; Retail and Wholesale Trade; e-Commerce
• Thema: Market Shares ; Market Power ; Differentiated Products Industries ; Merger Screening ; Fusionskontrolle ; Produktdifferenzierung ; Marktmacht ; Relevanter Markt ; Mark-up Pricing ; Konzentrationspolitik ; Indexberechnung ; Einzelhandel ; Irland ; EU-Staaten

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Mariuzzo, Franco ; Walsh, Patrick Paul ; Whelan, Ciara
• Ereignis: Veröffentlichung
• (wer): University College Dublin, Department of Economics
• (wo): Dublin
• (wann): 2005

Weitere Informationen

• Handle: http://hdl.handle.net/10419/72432
• Letzte Aktualisierung: 10.03.2025, 11:43 MEZ