Matthew C. Weinberg

Did Robert Bork Understate the Competitive Impact of Mergers? Evidence from Consummated Mergers

In The Antitrust Paradox, Robert Bork viewed most mergers as either competitively neutral or efficiency enhancing. In his view, only mergers creating a dominant firm or monopoly were likely to harm consumers. Bork was especially skeptical of oligopoly concerns resulting from mergers. In this paper, we provide a critique of Bork’s views on merger policy from The Antitrust Paradox. Many of Bork’s recommendations have been implemented over time and have improved merger analysis. Bork’s proposed horizontal merger policy, however, was too permissive. In particular, the empirical record shows that mergers in oligopolistic markets can raise consumer prices.

The Price Effects of a Large Merger of Manufacturers: A Case Study of Maytag-Whirlpool

Many experts speculate that U.S. antitrust policy towards horizontal mergers has been too lenient. We estimate the price effects of Whirlpools acquisition of Maytag to provide new evidence on this debate. We compare price changes in appliance markets most affected by the merger to markets where concentration changed much less or not at all. We estimate price increases for dishwashers and relatively large price increases for clothes dryers, but no price effects for refrigerators or clothes washers. The combined firms market share fell across all four affected categories and the number of distinct appliance products fell.

Retrospective Analysis of Hospital Mergers

Abstract Retrospective analyses of hospital mergers may be uniquely valuable because they speak directly to two important issues – the methods used for delineating relevant geographic markets in hospital merger analysis, and the implications of not‐for‐profit status on post‐merger hospital pricing – that have been systematically misunderstood by the courts and other policy analysts, and which likely have led to systematically biased judicial decisions. By identifying these systematic analytical errors and their implications for judicial decision making, retrospective studies of consummated hospital mergers have the capacity to greatly improve the quality of future antitrust policy making.

Understanding the Price Effects of the MillerCoors Joint Venture

We document abrupt increases in retail beer prices just after the consummation of the MillerCoors joint venture, both for MillerCoors and its major competitor, Anheuser‐Busch. Within the context of a differentiated‐products pricing model, we test and reject the hypothesis that the price increases can be explained by movement from one Nash–Bertrand equilibrium to another. Counterfactual simulations imply that prices after the joint venture are 6%–8% higher than they would have been with Nash–Bertrand competition, and that markups are 17%–18% higher. We relate the results to documentary evidence that the joint venture may have facilitated price coordination.

The Price Effects of a Large Merger of Manufacturers

Many experts have speculated that U.S. antitrust policy towards horizontal mergers was too lenient over the last decade. We estimate the price effects resulting from the merger of Whirlpool and Maytag to provide new evidence on this debate. The merger substantially increased concentration in four appliance markets: clothes washers and dryers, refrigerators and dishwashers. We compare the change in prices for appliance markets most affected by the merger to markets where concentration changed much less or not at all. We find evidence of modest price increases for dishwashers and relatively large price increases for clothes dryers while refrigerator and clothes washer prices appear largely unchanged as a result of the merger. The combined Whirlpool/Maytag’s market share fell across all four affected categories after the merger. We also find that Whirlpool/Maytag reduced the number of distinct appliance products offered post-acquisition.

How Does Advertising Depend on Competition? Evidence from U.S. Brewing

The relationship between market structure and advertising has been extensively studied, but has generated sharply opposing theoretical predictions, as well as inconclusive empirical findings, likely because of severe endogeneity concerns. We exploit the 2008 merger of Miller and Coors in the U.S. brewing industry to examine how changes in local concentration affect firms’ advertising behavior. Well-established regional preferences over beer brands, and the sharp increase in concentration from the merger, make this an excellent setting to analyze this question. We find a significant positive effect of local market concentration on advertising expenditures: a 100-point increase in the Herfindahl–Hirschmann Index measure of concentration increases advertising per capita by about 5%. Our findings shed light on how and when firms choose to deploy advertising. The online appendix is available at https://doi.org/10.1287/mnsc.2017.2889. This paper was accepted by Eric Anderson, marketing.