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Articles

Can Horizontal Mergers Actually Boost Competition?

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By Dirk Hackbarth, Bart Taub
| promarket.org
Research by Dirk Hackbarth and Bart Taub shows the potential to merge in the future increases competition prior to merging. Hence–in contrast to the conventional view–mergers can indeed be pro-competitive. According to the market power doctrine, the concentration of output among firms in an industry is a measure of market power in that industry. More market power is synonymous with monopoly: prices increase and output falls, to the detriment of consumers and to society at large.
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