Dynamic efficiencies of the 1997 Boeing‐McDonnell Douglas merger.
We evaluate the welfare effects of the 1997 Boeing‐McDonnell Douglas merger in the medium‐sized, wide‐body aircraft industry. We find that the merger led to lower prices. To explain the price drop, we develop a dynamic oligopoly game with learning‐by‐doing. We quantify the welfare effects of the mer...
| Publicado en: | RAND Journal of Economics (Wiley-Blackwell) Vol. 50; no. 3; pp. 666 - 695 |
|---|---|
| Autores principales: | , |
| Formato: | Artículo |
| Publicado: |
Wiley-Blackwell
Fall2019
|
| Materias: | |
| Acceso en línea: | Ver este registro en EBSCOhost |
| Sumario: | We evaluate the welfare effects of the 1997 Boeing‐McDonnell Douglas merger in the medium‐sized, wide‐body aircraft industry. We find that the merger led to lower prices. To explain the price drop, we develop a dynamic oligopoly game with learning‐by‐doing. We quantify the welfare effects of the merger by incorporating both increased market power and merger efficiencies from accelerated learning‐by‐doing. Our dynamic analysis indicates that net consumer surplus increased by as much as $5.14 billion, whereas a static model ignoring efficiencies of learning‐by‐doing predicts a $0.92 billion loss. |
|---|