Monopoly Mergers Boost Prices but Expand Coverage, Benefiting Consumers
The article discusses how a merger between two companies can affect prices and investments in a market. Initially, these firms compete in pricing and coverage for a new technology, but when they merge, their strategies change. The merged company can then charge different prices and offer different coverage for their products. The study revealed that after the merger, prices go up, total coverage increases, but coverage for a specific area with multiple products might decrease. Surprisingly, the merger could improve overall welfare and the well-being of consumers.