Empirical analysis of merger enforcement under the 1992 merger guidelines

This paper presents an analysis of merger enforcement at the Federal Trade Commission under the 1992 Merger Guidelines. The econometric analysis suggests that enforcement decisions are best predicted with the Herfindahl index when the relevant theory is collusion and the number of significant rivals when the relevant theory is unilateral effects. Evidence such as "hot" documents, customer complaints, and historical events suggestive of past competitive problems also increase the chance of a challenge. Mirror image considerations suggestive of continued post-merger competition ("cold" documents, customer support, and procompetitive events) reduce the probability of challenge in one specification.