Analyzing the Competitive Effects of Mergers: Is There Anything Special about Railroads

Empirical evidence demonstrates that mergers, on average, create value for shareholders of the merging firms. The relevant question from an antitrust perspective, however, is the source of these gains. Increased efficiency is one possibility. It is also possible that in some cases merger gains derive not from enhanced efficiency, but rather from an enhanced ability to realize monopoly profits. To determine whether a proposed merger is likely to be pro- or anti-competitive, economists often follow the approach outlined in the United States Justice Department\u27s Merger Guidelines and ask whether the merger seems likely to facilitate collusion. In reviewing the competitive effects of the proposed sale of Conrail to Norfolk Southern, the Justice Department took the position that the standards it uses to analyze mergers under the Clayton Act are substantially the same as the standards used by the Interstate Commerce Commission (ICC) in analyzing railroad mergers coming before that body. This paper is not a critical review of the Justice Department\u27s economic analysis of the recently abandoned transaction between Conrail and Norfolk Southern, nor is it a legal analysis of the Justice Department\u27s position that its standards are those of the ICC. The subjects of this paper are more general. First, we explain in more detail the conventional economic analysis of the competitive effects of mergers and how that analysis should be applied in the railroad industry. Defining the relevant market receives special emphasis. Second, we consider whether there is anything extraordinary about the railroad industry that renders the conventional analysis incomplete or inappropriate

Analyzing the Competitive Effects of Mergers: Is There Anything Special about Railroads

Empirical evidence demonstrates that mergers, on average, create value for shareholders of the merging firms. The relevant question from an antitrust perspective, however, is the source of these gains. Increased efficiency is one possibility. It is also possible that in some cases merger gains derive not from enhanced efficiency, but rather from an enhanced ability to realize monopoly profits. To determine whether a proposed merger is likely to be pro- or anti-competitive, economists often follow the approach outlined in the United States Justice Department\u27s Merger Guidelines and ask whether the merger seems likely to facilitate collusion. In reviewing the competitive effects of the proposed sale of Conrail to Norfolk Southern, the Justice Department took the position that the standards it uses to analyze mergers under the Clayton Act are substantially the same as the standards used by the Interstate Commerce Commission (ICC) in analyzing railroad mergers coming before that body. This paper is not a critical review of the Justice Department\u27s economic analysis of the recently abandoned transaction between Conrail and Norfolk Southern, nor is it a legal analysis of the Justice Department\u27s position that its standards are those of the ICC. The subjects of this paper are more general. First, we explain in more detail the conventional economic analysis of the competitive effects of mergers and how that analysis should be applied in the railroad industry. Defining the relevant market receives special emphasis. Second, we consider whether there is anything extraordinary about the railroad industry that renders the conventional analysis incomplete or inappropriate

On the welfare impact of mergers of complements: Raising rivals' costs versus elimination of double marginalization

Abstract A common view in antitrust analysis is that mergers of complements can have raising rivals' costs and elimination of double marginalization effects, with the net effect on consumer welfare thus unclear. We revise this view in the context of a merger between a monopolist in one market and a duopoly producer of a complement good. With linear demand and imperfect substitutability, while such a merger increases the price of the monopolized component, elimination of double marginalization dominates any raising rivals' costs effects, increasing consumer welfare. We discuss a variety of extensions

High-Frequency Temperature Variability Mirrors Fixed Differences in Thermal Limits of the Massive Coral \u3ci\u3ePorites lobata\u3c/i\u3e

Spatial heterogeneity in environmental characteristics can drive adaptive differentiation when contrasting environments exert divergent selection pressures. This environmental and genetic heterogeneity can substantially influence population and community resilience to disturbance events. Here, we investigated corals from the highly variable back-reef habitats of Ofu Island in American Samoa that thrive in thermal conditions known to elicit widespread bleaching and mortality elsewhere. To investigate the relative importance of acclimation versus site of origin in shaping previously observed differences in coral tolerance limits at Ofu Island, specimens of the common Indo-Pacific coral Porites lobata from locations with differing levels of thermal variability were acclimated to low and high thermal variation in controlled common garden aquaria. Overall, there were minimal effects of the acclimation exposure. Corals native to the site with the highest level of daily variability grew fastest, regardless of acclimation treatment. When exposed to lethal thermal stress, corals native to both variable sites contained elevated levels of heat shock proteins and maintained photosynthetic performance for 1–2 days longer than corals from the stable environment. Despite being separated by \u3c5 \u3ekm, there was significant genetic differentiation among coral colonies (FST=0.206, PCladocopium sp. (ITS type C15). Our study demonstrates consistent signatures of adaptation in growth and stress resistance in corals from naturally thermally variable habitats, suggesting that differences in the amount of thermal variability may be an important contributor to adaptive differentiation in reef-building corals

The Freshman, vol. 4, no. 2

The Freshman was a weekly, student newsletter issued on Mondays throughout the academic year. The newsletter included calendar notices, coverage of campus social events, lectures, and athletic teams. The intent of the publication was to create unity, a sense of community, and class spirit among first year students. Coverage in this issue includes discussion of the annual battle between the freshman and sophomore classes. The Class of 1937 run of The Freshman featured original cover art by sketch artist Jack Frost (John Edward Frost, 1915-1997), who was born in Eastport, Maine. He attended the University of Maine for only a single academic year before moving to Massachusetts to work for the Boston Herald. Frost later became a columnist and illustrator for the Boston Post

The Freshman, vol. 4, no. 3

The Freshman was a weekly, student newsletter issued on Mondays throughout the academic year. The newsletter included calendar notices, coverage of campus social events, lectures, and athletic teams. The intent of the publication was to create unity, a sense of community, and class spirit among first year students. The Class of 1937 run of The Freshman featured original cover art by sketch artist Jack Frost (John Edward Frost, 1915-1997), who was born in Eastport, Maine. He attended the University of Maine for only a single academic year before moving to Massachusetts to work for the Boston Herald. Frost later became a columnist and illustrator for the Boston Post

The Freshman, vol. 4, no. 5

The Freshman was a weekly, student newsletter issued on Mondays throughout the academic year. The newsletter included calendar notices, coverage of campus social events, lectures, and athletic teams. The intent of the publication was to create unity, a sense of community, and class spirit among first year students. Included in this issue is a discussion of School Spirit. The Class of 1937 run of The Freshman featured original cover art by sketch artist Jack Frost (John Edward Frost, 1915-1997), who was born in Eastport, Maine. He attended the University of Maine for only a single academic year before moving to Massachusetts to work for the Boston Herald. Frost later became a columnist and illustrator for the Boston Post

Scholarship in Review 84(2)

Scholarship in Review was a magazine highlighting research and scholarly activities at Central Washington University, published by the Office of Graduate Studies and Research.https://digitalcommons.cwu.edu/scholarship_in_review/1000/thumbnail.jp