On the misuse of regressions of price on the HHI in merger review

Journal Article (Journal Article)

The article explains why regressions of price on HHI should not be used in merger review. Both price and HHI are equilibrium outcomes determined by demand, supply, and the factors that drive them. Thus, a regression of price on the HHI does not recover a causal effect that could inform the likely competitive effects of a merger. Nonetheless, economic theory is consistent with the legal presumption that a merger is likely to have adverse competitive effects if it occurs in a concentrated market and makes that market more concentrated.

Full Text

Duke Authors

Cited Authors

  • Miller, N; Berry, S; Morton, FS; Baker, J; Bresnahan, T; Gaynor, M; Gilbert, R; Hay, G; Jin, G; Kobayashi, B; Lafontaine, F; Levinsohn, J; Marx, L; Mayo, J; Nevo, A; Pakes, A; Rose, N; Rubinfeld, D; Salop, S; Schwartz, M; Seim, K; Shapiro, C; Shelanski, H; Sibley, D; Sweeting, A; Wosinska, M

Published Date

  • July 1, 2022

Published In

Volume / Issue

  • 10 / 2

Start / End Page

  • 248 - 259

Electronic International Standard Serial Number (EISSN)

  • 2050-0696

International Standard Serial Number (ISSN)

  • 2050-0688

Digital Object Identifier (DOI)

  • 10.1093/jaenfo/jnac009

Citation Source

  • Scopus