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I present a structural empirical model of a one-sided one-to-many matching with complementarities to quantify the effect of subsidy design on endogenous merger matching. I investigate shipping mergers and consolidations in Japan in 1964. At the time, 95 firms formed six large groups. I find that the existence of unmatched firms enables us to recover merger costs, and the importance of technological diversification varies across carrier and firm types. The counterfactual simulations show that 20 % of government subsidy expenditures could have been cut. Also, the government could have possibly changed the equilibrium number of groups between one and six.

We revisit the conduct parameter estimation in homogeneous goods markets. In contrast to the pessimistic simulation results of linear models shown in Perloff and Shen (2012), our simulation shows that the estimation becomes accurate by properly adding demand shifters in the supply estimation and increasing the sample size. We also investigate log-linear models widely used in Industrial Organization literature and recommended by Perloff and Shen (2012) and find other estimation problems. Based on the numerical investigation, at least the linear model can achieve a proper estimation of the conduct parameter.