American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Merger Effects and Antitrust Enforcement: Evidence from US Consumer Packaged Goods
American Economic Review
(pp. 2996–3035)
Abstract
We document the effects of a comprehensive set of mergers of consumer packaged goods manufacturers on prices, quantities, and product assortment. Across specifications, we find a small average price effect of mergers (−0.5−1.1 percent) but substantial heterogeneity, with a standard deviation between 3.9 and 7.6 percentage points. Through a model of enforcement, we find that agencies act as if they challenge mergers they expect would increase prices more than 4.8 to 6.3 percent. Increases in stringency would reduce prices and the prevalence of completed price-increasing mergers, with minimal impacts on blocked price-decreasing mergers, at significantly greater agency burden.Citation
Bhattacharya, Vivek, Gastón Illanes, and David Stillerman. 2026. "Merger Effects and Antitrust Enforcement: Evidence from US Consumer Packaged Goods." American Economic Review 116 (8): 2996–3035. DOI: 10.1257/aer.20240497Additional Materials
JEL Classification
- D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
- K21 Antitrust Law
- L13 Oligopoly and Other Imperfect Markets
- L41 Monopolization; Horizontal Anticompetitive Practices
- L66 Food; Beverages; Cosmetics; Tobacco; Wine and Spirits