Concern about coordinated effects has played a central role in US merger enforcement policy for more than 30 years. In this chapter, the author uses case examples to discuss the economic factors that influence the theory of collusion. He also explains how economists apply organizing principles to analyze proposed mergers, using examples drawn from mergers that were ultimately challenged by the DOJ or the FTC.
This chapter appears in Antitrust Economics for Lawyers. For more information, click here.
Assessing umbrella pricing incentives
When collusive agreements involve a subset of firms in an industry, they may create the incentive and ability for firms that are not participants in the cartel...