Replication data for: Does Merger Simulation Work? Evidence from the Swedish Analgesics Market
Principal Investigator(s): View help for Principal Investigator(s) Jonas Björnerstedt; Frank Verboven
Version: View help for Version V1
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| replication | 10/12/2019 12:21:PM | ||
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text/plain | 14.6 KB | 10/12/2019 08:21:AM |
Project Citation:
Bjo¨rnerstedt, Jonas, and Verboven, Frank. Replication data for: Does Merger Simulation Work? Evidence from the Swedish Analgesics Market. Nashville, TN: American Economic Association [publisher], 2016. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E113581V1
Project Description
Summary:
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We analyze a large merger in the Swedish market for analgesics (painkillers). The merging firms raised prices by 40 percent, and some outsiders raised prices by more than 10 percent. We confront these changes with predictions from a merger simulation model. With basic supply side assumptions, the models correctly or moderately underpredict the merging firms' price increase. However, they predict a larger price increase for the smaller firm, which was not the case in practice, and they underpredict the outsiders' responses. We consider several supply side explanations: a plausible cost increase after the merger and the possibility of partial collusion.
Scope of Project
JEL Classification:
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C63 Computational Techniques; Simulation Modeling
D22 Firm Behavior: Empirical Analysis
G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
L11 Production, Pricing, and Market Structure; Size Distribution of Firms
L25 Firm Performance: Size, Diversification, and Scope
L65 Chemicals; Rubber; Drugs; Biotechnology; Plastics
C63 Computational Techniques; Simulation Modeling
D22 Firm Behavior: Empirical Analysis
G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
L11 Production, Pricing, and Market Structure; Size Distribution of Firms
L25 Firm Performance: Size, Diversification, and Scope
L65 Chemicals; Rubber; Drugs; Biotechnology; Plastics
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