With firm profitability data for a cross-section of geographic markets, it is possible to determine the relative importance of firm and market effects on profitability. Analysis of variance from a panel of multibank holding companies in Texas suggests that firm effects are more important than...

This paper analyzes the effects of mergers between firms competing by simultaneously choosing price and location. Products combined by a merger are repositioned away from each other to reduce cannibalization, and non-merging substitutes are, in response, repositioned between the merged products....