Margins of error: What should be the role of margins in merger assessment?

Margins of error: What should be the role of margins in merger assessment?

Cristina Caffarra
Antitrust & Competition

A growing body of academic work has found that corporate margins around the world are increasing and there is an ongoing debate about what this should mean for antitrust enforcement. We think the debate that followed the Chief Economist’s intervention at the CRA conference tends to conflate four distinct questions: i) actual trends in margins/profitability; ii) the causes for this phenomenon; iii) whether weak antitrust enforcement might be to blame; and iv) whether higher margins (whatever their cause) point to the need to tighten merger enforcement.

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