In this issue:

Competition authorities are looking hard at the economic theories that underlie the empirical analysis they use when evaluating mergers. With their recent merger guidelines, both the EC and U.S. competition authorities have introduced new methodology and emphasis—raising a lively debate in the process. This issue looks at the state of the art in merger analysis, seeking to answer the question: Just what are the best tools to use to predict the competitive effects of mergers?


What’s Up With Merger Analysis?

Michael Baumann, Paul Godek, Mar 14, 2011

Margin of Error: The Flawed Paradigm in the New Merger Guidelines

The analytical core of the new Guidelines relies on an assumption that was long ago shown to be invalid. Michael G. Baumann (Economists Inc.) & Paul E. Godek (Compass Lexecon)

Dennis Carlton, Mar 14, 2011

Use and Misuse of Empirical Methods in the Economics of Antitrust

Discussing some of the theoretical and empirical strengths and weaknesses of the approaches to antitrust analysis, including a critique of some of the recent methods. Dennis Carlton (Univ. of Chicago)

Sonia Jaffe, Glen Weyl, Mar 14, 2011

Price Theory and Merger Guidelines

Our work extends existing first-order approaches to merger analysis to provide quantitative estimates of price and consumer surplus changes. Sonia Jaffe & E. Glen Weyl (Harvard Univ.)

Michael Noel, Mar 14, 2011

Upward Price Pressure, Merger Simulation, and Merger Simulation Light

Considering the advantages and limitations of implementing UPP in practice, discussing the relationship between UPP and merger simulation, and ultimately arguing in favor of a “merger simulation light” style screen. Michael D. Noel (Univ. of Calif.,San Diego)

Mar 15, 2011

New Tools for Competitive Effects: Do We Really Know What Works Best?

Summarizing efforts to evaluate empirically the relative strengths and weaknesses of the empirical techniques used to analyze theories of unilateral effects. G. Steven Olley (NERA)

Jan Peter van der Veer, Mar 14, 2011

The Use of Empirical Techniques in European Commission Merger Cases

Reviewing the main empirical analyses applied by the European Commission in recent merger cases, focusing on unilateral effects cases. Jan Peter van der Veer (RBB Economics)