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American Economic Journal: Economic Policy: Vol. 5 No. 1 (February 2013)

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

Article Citation

Ashenfelter, Orley C., Daniel S. Hosken, and Matthew C. Weinberg. 2013. "The Price Effects of a Large Merger of Manufacturers: A Case Study of Maytag-Whirlpool." American Economic Journal: Economic Policy, 5(1): 239-61.

DOI: 10.1257/pol.5.1.239

Abstract

Many experts speculate that US antitrust policy towards horizontal mergers has been too lenient. We estimate the price effects of Whirlpool's 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 firm's market share fell across all four affected categories, and the number of distinct appliance products offered for sale fell. (JEL G34, K21, L11, L41, L68)

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Authors

Ashenfelter, Orley C. (Princeton U)
Hosken, Daniel S. (US Federal Trade Commission)
Weinberg, Matthew C. (Drexel U)

JEL Classifications

G34: Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
K21: Antitrust Law
L11: Production, Pricing, and Market Structure; Size Distribution of Firms
L41: Monopolization; Horizontal Anticompetitive Practices
L68: Appliances; Other Consumer Durables

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