Mavericks and Mergers in Concentrated Markets

56 Pages Posted: 5 Dec 2019

See all articles by Alexander McGlothlin

Alexander McGlothlin

University of Kentucky, Gatton College of Business and Economics, Department of Economics, Students

Date Written: November 20, 2019

Abstract

Maverick firms have an outsized influence on the markets in which they compete, but they are rarely studied in the literature. Mergers involving mavericks have the potential to exert larger anticompetitive effects than those involving non-mavericks. Using difference-in-differences as well as difference-in-difference-in-differences, I find anticompetitive price effects on airfare due to a merger between Southwest Airlines and AirTran Airways, two maverick firms in the airline industry. I contribute to the literature by showing the heterogeneous impact of the merger across markets by using a triple-difference in merger analysis and providing empirical evidence for antitrust enforcement from a merger involving two maverick firms.

Suggested Citation

McGlothlin, Alexander, Mavericks and Mergers in Concentrated Markets (November 20, 2019). Available at SSRN: https://ssrn.com/abstract=3490329 or http://dx.doi.org/10.2139/ssrn.3490329

Alexander McGlothlin (Contact Author)

University of Kentucky, Gatton College of Business and Economics, Department of Economics, Students ( email )

Lexington, KY
United States

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