Year of Publication
Doctor of Philosophy (PhD)
Business and Economics
Dr. Frank Scott
Maverick ﬁrms are deﬁned in the Horizontal Merger Guidelines as those ﬁrms that may exert a disproportional competitive eﬀect in markets where they compete. The Guidelines mandate that mergers and acquisitions involving maverick ﬁrms be given special consideration by the Agencies, however not much is known about maverick ﬁrms or their competitive eﬀects when they are acquired. The Guidelines describe characteristics that may be present in a maverick ﬁrm, but stop short of providing a discrete test that may be used for their identiﬁcation. They are often small ﬁrms whose acquisitions do not warrant reporting to the Agencies due to falling under the thresholds in the Hart Scott Rodino Act, and when they are reported, they are often diﬃcult to identify. With the increase in acquisitions of startups and other disruptive ﬁrms by dominant incumbents as seen in the tech sector, there is public policy interest in assessing the possible damages or beneﬁts that may arise in mergers and acquisitions of maverick ﬁrms. This dissertation takes a look at two mergers in two diﬀerent industries that may shed light on these questions.
The ﬁrst chapter analyzes a merger in the airline industry. Using publicly available data from the Department of Transportation, I use a diﬀerence-in-diﬀerences and a triple diﬀerence approach to analyze the price eﬀects of the merger between Southwest Airlines and AirTran Airways, two maverick ﬁrms in the airline industry. I ﬁnd anticompetitive merger-related price eﬀects that are multiple times those of previous merger analyses in the airline industry of non-maverick ﬁrms. The results suggest that the merger weakened the ﬁrm’s own incentives to act as a maverick due to the elimination of maverick competition, as well as its incentives to act as a maverick towards other ﬁrms.
The second chapter analyzes the acquisition of a maverick ﬁrm by a non-maverick dominant incumbent in the beer industry. I use the Nielsen Scanner database and a diﬀerence-in-diﬀerences approach to uncover the merger-related eﬀects on price, quantity, and variety of oﬀerings due to the acquisition of Goose Island by AnheuserBusch Inbev. A fear among policymakers is that dominant incumbents will acquire mavericks to release competitive pressure on themselves or foreclose parts of the relevant market to other startups. I ﬁnd the contrary to be true in this acquisition, with the incumbent ﬁrm maintaining price competition while expanding sales and encouraging entry into the market for craft beer.
Digital Object Identifier (DOI)
McGlothlin, Alexander, "Antitrust Implications for Mergers Involving Maverick Firms" (2020). Theses and Dissertations--Economics. 53.
Available for download on Friday, February 05, 2021