Follow on Google News News By Tag Industry News News By Place Country(s) Industry News
Follow on Google News | ![]() Research Proves Effects of Company Mergers on PricesBy: Koc University According to the findings of the team, who downloaded the service prices for three major car rental companies operating in 343 airports in 2005, 2009 and 2016 from the Internet, company mergers create a trend of increase in prices during periods, where business travel increases. On the other hand, during holiday periods a trend of decrease in prices is observed thanks to the cost advantages provided by mergers. Güler and his colleagues explain these findings with an economic model based on the relative price flexibilities of various customer groups. These findings may appear easy to predict, but Assoc. Prof Umut Güler's work allows them to be documented with a rigorous and long-term research effort for the first time. These results are of great importance for government bodies regulating competition. In most countries, there are tight restrictions regulating competition and monitoring monopolization, and company mergers are mostly subject to permission. In general terms, mergers that are not considered to have a substantial effect on prices may not be subject to intervention by the authorities. However, as this research shows, looking at the average prices may be misleading, as the price effects of company mergers can be different for various consumer groups. In other words, this research illustrates that a company merger that may not be considered to have a significant effect on prices may actually produce undesired results for certain customer segments. Reference https://pubsonline.informs.org/ Heterogeneous Price Effects of Consolidation: MARKETING SCIENCE Ali Umut Guler , Kanishka Misra , Vishal Singh Published Online:15 Jan 2019 https://doi.org/ End
|
|