Mergers Boost Innovation, but Hurt Consumers in Homogenous Markets
The article explores how R&D investments and mergers impact industries with similar products. It shows that mergers happen when R&D is effective, and if firms' investments are substitutes or complements. When firms' R&D investments are substitutes and consumer welfare is the focus, antitrust policies are straightforward. But when total welfare and complementing R&D investments are considered, policies become more complex.