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...
| Published in: | RAND Journal of Economics (Wiley-Blackwell) Vol. 50; no. 3; pp. 666 - 695 |
|---|---|
| Main Authors: | , |
| Format: | Article |
| Published: |
Wiley-Blackwell
Fall2019
|
| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=137846031&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 137846031 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 07416261 56RJ jtl: RAND Journal of Economics (Wiley-Blackwell) issn: 07416261 maglogo: Y pubinfo: dt: Fall2019 vid: 50 iid: 3 pid: 480 pub: Wiley-Blackwell artinfo: ui: 137846031 10.1111/1756-2171.12291 ppf: 666 ppct: 29 formats: fmt: – @attributes: type: T – @attributes: type: C – @attributes: type: P size: 1016KB tig: atl: Dynamic efficiencies of the 1997 Boeing‐McDonnell Douglas merger. aug: au: An, Yonghong Zhao, Wei affil: Texas A&M University and Nankai University Competition Economics LLC su: Boeing Co. Oligopolies Consumers' surplus Aircraft industry Market power sug: subj: Oligopolies Boeing Co. Motorcycle, boat and other motor vehicle dealers Aerospace product and parts manufacturing Aircraft Manufacturing Motorcycle, ATV, and All Other Motor Vehicle Dealers Consumers' surplus Aircraft industry Market power ab: 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. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
|---|