Abstract There are both market power and cost efficiency effects associated with airline mergers. Previous studies, however, have primarily focused on merger price effects, which is the net effect of these two forces. This paper attempts to decompose and measure these effects by using a model that allows us to derive proxies for market power and cost efficiency. In particular, we are interested in merger effects in markets where the merging airlines directly competed prior to their merger. We study two main mergers – Delta/Northwest and United/Continental – and find that both increase market power in markets where the merging airlines competed prior to merger. We also find evidence of marginal cost efficiencies associated with both mergers. These efficiency effects are relatively larger than the market power effects and come from different sources. In the case of the Delta/Northwest merger, efficiencies come from markets where the merging airlines competed prior to the merger, whereas in the case of United/Continental, they come from markets where the merging firms did not compete. The market power effects only stem from markets with pre-existing competition among merging airlines, perhaps due to the elimination of a competitor in those markets. These findings, thus, support the long-standing hypothesis that market power and efficiency are important in motivating horizontal mergers.

中文翻译：

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竞争市场中的市场力量和边际成本效应：来自航空公司合并的证据

摘要航空公司兼并既有市场力量，也有成本效率效应。但是，先前的研究主要集中在兼并价格效应上，这是这两种力量的净效应。本文试图通过使用一个模型来分解和衡量这些影响，该模型允许我们得出市场支配力和成本效率的代理。特别是，我们对合并航空公司在合并之前直接竞争的市场中的合并影响感兴趣。我们研究了两个主要的合并-达美航空/西北航空和美联航/大陆航空-发现两者都增加了合并航空公司在合并前竞争的市场的市场力量。我们还发现了与两次合并相关的边际成本效率的证据。这些效率影响相对大于市场力量影响，并且来自不同的来源。就达美航空/西北航空的合并而言，效率来自合并航空公司在合并之前竞争的市场，而对于美联航/洲际，则来自合并公司没有竞争的市场。市场力量的影响仅源于合并航空公司之间先前存在竞争的市场，这可能是由于这些市场中的竞争对手被淘汰所致。因此，这些发现支持了长期以来的假设，即市场力量和效率在激励横向合并中很重要。市场力量的影响仅源于合并航空公司之间先前存在竞争的市场，这可能是由于这些市场中的竞争对手被淘汰所致。因此，这些发现支持了长期以来的假设，即市场力量和效率在激励横向合并中很重要。市场力量的影响仅来自合并航空公司之间先前存在竞争的市场，这可能是由于这些市场中的竞争对手被淘汰所致。因此，这些发现支持了长期以来的假设，即市场力量和效率在激励横向合并中很重要。