Defending a challenged merger on the basis of synergies requires an analysis of the likely pass through to consumers of associated marginal cost reductions. This paper explores the nature and extent of that pass though with differentiated consumer products. Pass-through rates are shown to depend...

We investigate the relationship between the price effects of mergers in Bertrand oligopoly and the rates at which merger synergies are passed through to consumers in the form of lower prices. Our main conclusion is that pass-through rates and price effects are closely related. In particular,...

Public policy toward innovation faces a trade-off: Increasing the compensation of successful inventors increases dynamic efficiency by spurring technological progress, but it decreases static efficiency by enlarging a wedge between price and marginal cost. In making this trade-off, public policy...

The downstream effects of mergers between manufacturers of differentiated consumer products are partly determined by the relationship between the merging manufacturers and retailers. That relationship may be such that the retail price effects of the merger are exactly those if the manufacturers...

Contrary to the suggestion of Williamson (1968), a merger enhancing total social welfare through the creation of substantial efficiencies nevertheless may violate current antitrust law in the United States, which considers only the effects of mergers on consumers. To avoid violating antitrust...