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They Played the Merger Game: A Retrospective Analysis in the UK Videogames Market

Author

Listed:
  • L. Aguzzoni
  • E. Argentesi
  • P. Buccirossi
  • L. Ciari
  • T. Duso
  • M. Tognoni
  • C. Vitale
Abstract
We study the effect of a merger in a dynamic high-technology industry the videogame market which is characterized by frequent introduction of new products. To assess the impact of the merger between two large specialist retailers in the UK, we perform a difference-in-differences analysis comparing the price evolution of the merging parties to that of their 7 major competitors on an original sample of 196 videogames belonging to six different consoles. The results of our econometric analyses suggest that there has been a reduction in the general level of prices of both new and pre-owned games after the merger. This decline has been more marked for the merging parties, which suggests that the merger between Game and Gamestation did not lead to a substantial lessening of competition; rather it is consistent with the existence of efficiency gains.

Suggested Citation

  • L. Aguzzoni & E. Argentesi & P. Buccirossi & L. Ciari & T. Duso & M. Tognoni & C. Vitale, 2013. "They Played the Merger Game: A Retrospective Analysis in the UK Videogames Market," Working Papers wp908, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:wp908
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    References listed on IDEAS

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    1. repec:pri:cepsud:140weinberg is not listed on IDEAS
    2. Matthew T. Clements & Hiroshi Ohashi, 2005. "Indirect Network Effects And The Product Cycle: Video Games In The U.S., 1994–2002," Journal of Industrial Economics, Wiley Blackwell, vol. 53(4), pages 515-542, December.
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    Cited by:

    1. Franco Mariuzzo & Peter L. Ormosi, 2017. "Post-merger price dynamics matter, so why do merger retrospectives ignore them?," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2016-05, Centre for Competition Policy, University of East Anglia, Norwich, UK..

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    More about this item

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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