Mergers of Complementary Firms May Harm Consumers Through Reduced Compatibility and Foreclosure
In the study, the researchers examined how mergers between companies that sell complementary parts can impact prices, investments in making products work together, and consumer benefits. They focused on whether merged companies may have reasons and the ability to exclude competitors. The findings suggest that mergers in such cases can influence pricing, affect how much companies invest in making their products compatible, and change the benefits consumers receive. The research also looked into situations where merged companies may want to prevent other firms from competing effectively.