Mergers Slash Prices, Boost Welfare for Consumers
The article discusses how mergers between companies in the same market (horizontal mergers) can affect prices and competition in the market. The researchers found that when these mergers happen between companies that buy products from each other (vertical relationships), it can actually lower prices. This happens because when the merged companies pay less for their inputs, they can make their products more efficiently. This can lead to better products and lower prices for consumers. The study shows that if the merged companies reduce their costs by merging, it can benefit both the companies and the customers.