This paper introduces the Werden-Froeb Index (WFI) to assist in evaluating merger-specific efficiencies in horizontal … mergers. The index measures the weighted average reduction in marginal costs required to restore pre-merger equilibrium prices … and quantities after the (full or partial) merger is consummated. The WFI is well defined, objective and robust, and it …

primary effects of a merger. Our main result is that the level of search costs are crucial in determining the incentives of … profitable for the merging firms. If search costs are relatively high instead, a merger causes a fall in average price and this … triggers search. As a result, non-shoppers who didn’t find it worthwhile to search in the pre-merger situation, start searching …