There is diverging empirical evidence on the competitive effects of horizontal mergers: consumer prices (and thus presumably competitors' profits) often rise while competitors' share prices fall. Our model of endogenous mergers provides a possible reconciliation. It is demonstrated that...

The FTC's successful challenge of the Staples-Office Depot merger is one of the most important antitrust cases in recent years. Vital to the FTC's success was evidence that prices for office supplies were significantly higher in markets having only one firm operating office supply superstores...