Horizontal mergers and product quality
研究企业在价格和质量上竞争时横向合并的影响，发现合并方可能降低质量和价格，而外部企业则提高两者，导致平均价格和质量上升，但消费者总效用下降，社会福利可能因质量成本节约而增加。
Abstract We study the effects of a horizontal merger when firms compete on price and quality. In a Salop framework with three symmetric firms, several striking results appear. First, the merging firms reduce quality but possibly also price, whereas the outside firm increases both price and quality. As a result, the average price in the market increases, but also the average quality. Second, the outside firm benefits more than the merging firms from the merger, and the merger can be unprofitable for the merger partners, i.e., the “merger paradox” may appear. Third, the merger always reduces total consumer utility (though some consumers may benefit), but total welfare can increase due to endogenous quality cost savings. In a generalized framework with n firms, we identify two key factors for the merger effects: (i) the magnitude of marginal variable quality costs, which determines the nature of strategic interaction and (ii) the cross‐quality and cross‐price demand effects, which determines the intensity of price relative to quality competition. These findings have implications for antitrust policy in industries where quality is a key strategic variable for the firms.