Vertical Mergers Hike Prices, Hurt Consumers and Competition
This research looked at what happens when companies in different parts of the same industry join together. They focused on when a big company that makes and sells products merges with a smaller company that supplies materials. The study found that when these mergers happen, prices for materials can go up, making things cost more for customers. This usually leads to less happiness for customers. But in some cases, when other smaller suppliers are in the mix, the merger might help overall. This means that depending on what's most important - the happiness of customers or the general good - the decision on mergers can vary.