Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108208
Authors: 
Csorba, Gergely
Koltay, Gábor
Farkas, Dávid
Year of Publication: 
2011
Series/Report no.: 
IEHAS Discussion Papers MT-DP - 2011/18
Abstract: 
This paper develops an empirical method to identify the price effects of simultaneous mergers and to separate the different effects on the prices of the buyer and seller firms and on the prices of their respective competitors. Our difference-in-differences approach exploits variation in the presence of merging firms across local markets to form different treatment-control group pairs in order to estimate separate effects for each type of firms affected by the mergers. We apply this method to provide an ex post evaluation of two almost simultaneous mergers in the Hungarian retail gasoline market. We show that both mergers resulted in a significantly positive but economically negligible price effect, but while the first merger affected only the prices of buyer firm's stations, the second had an effect on the prices of seller's stations and of its competitors. We also demonstrate that the results are not sensitive to the assumed dates when the mergers effectively change the firms' pricing policy.
Subjects: 
ex post evaluation
mergers
difference-in-differences estimation
treatment effects
retail gasoline
JEL: 
D43
L13
L49
ISBN: 
978-615-5024-54-2
Document Type: 
Working Paper

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