Working Paper: NBER ID: w17476
Authors: Orley C. Ashenfelter; Daniel S. Hosken; Matthew C. Weinberg
Abstract: Many experts speculate that U.S. antitrust policy towards horizontal mergers has been too lenient. We estimate the price effects of Whirlpool's acquisition of Maytag to provide new evidence on this debate. We compare price changes in appliance markets most affected by the merger to markets where concentration changed much less or not at all. We estimate price increases for dishwashers and relatively large price increases for clothes dryers, but no price effects for refrigerators or clothes washers. The combined firm's market share fell across all four affected categories and the number of distinct appliance products fell.
Keywords: mergers; antitrust; price effects; appliance markets
JEL Codes: K21; L11; L4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Whirlpool's acquisition of Maytag (L68) | price increase for Maytag dishwashers (L68) |
| Whirlpool's acquisition of Maytag (L68) | price increase for Whirlpool clothes dryers (L68) |
| Whirlpool's acquisition of Maytag (L68) | no systematic evidence of price changes for refrigerators (L68) |
| Whirlpool's acquisition of Maytag (L68) | no systematic evidence of price changes for clothes washers (L68) |
| Whirlpool's acquisition of Maytag (L68) | reduction in market power in affected categories (D40) |
| Whirlpool's acquisition of Maytag (L68) | decrease in number of distinct appliance products offered post-merger (L68) |