Discussion Papers 1330, 42 S.
Luca Aguzzoni, Elena Argentesi, Paolo Buccirossi, Lorenzo Ciari, Tomaso Duso, Massimo Tognoni, Cristiana Vitale
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Published in: Journal of Competition Law & Economics 10 (2014), 4, S. 933-958
We study the effect of a merger in a dynamic high-technology industry-the videogame market- which is characterized by frequent introduction of new products. To assess the impact of the merger between two large specialist retailers in the UK, we perform a difference-in-differences analysis comparing the price evolution of the merging parties to that of their 7 major competitors on an original sample of 196 videogames belonging to six different consoles. The results of our econometric analyses suggest that there has been a reduction in the general level of prices of both new and pre-owned games after the merger. This decline has been more marked for the merging parties, which suggests that the merger between Game and Gamestation did not lead to a substantial lessening of competition; rather it is consistent with the existence of efficiency gains.
Keywords: Mergers, ex-post evaluation, videogames market, retail sector
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