Market And Welfare Effects Of Multi-Product Mergers With Reference To Tyson-IBP Merger

Bouras, David; Azzam, Azzeddine

doi:10.19030/jber.v11i12.8260

Cited by 1 publication

(7 citation statements)

References 7 publications

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“…For the empirical part of this study, the linear inverse market demand relationships are expressed by equations (23) and (24). Bouras (2007) and Bouras and Azzam (2013) set α x = α y = 1 . In order to avoid corner solutions and with no loss of generality, the present work sets the constant parameters, in both demand equations, equal to 10.…”

Section: Model Calibration Results and Discussionmentioning

confidence: 99%

“…These findings indicate that mergers between firms producing demand-related goods, under certain conditions, may foster collusion. Bouras and Azzam (2013) analyzed the market and welfare effects of the Tyson-IBP merger. The authors concluded that the merger has produced cost efficiencies necessary to make consumers and livestock producers better off.…”

Section: Introductionmentioning

confidence: 99%

“…Using estimates of real-world own-and cross-price demand elasticities for chicken and red meat, we calibrate the model and test this theory within a multiproduct theoretical framework. Two features differentiate this work from Bouras (2007) and Bouras and Azzam (2013). In the aforementioned studies, the degree of substitutability between the two demandrelated goods is the same.…”

Section: Introductionmentioning

confidence: 99%

“…Bouras and Azzam (2013) analyzed the market and welfare effects of the Tyson–IBP merger. The authors concluded that the merger has produced cost efficiencies necessary to make consumers and livestock producers better off.…”

Section: Introductionmentioning

confidence: 99%

“…Two features differentiate this work from Bouras (2007) and Bouras and Azzam (2013). In the aforementioned studies, the degree of substitutability between the two demand-related goods is the same.…”

Section: Introductionmentioning

confidence: 99%

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Collusion-enhancing effects of the own- and cross-price demand elasticities in merging multiproduct food industries: The case of chicken and red meat in the United States

Panagiotou

2018

Outlook Agric

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The recent wave of megamergers sweeping the US food industry has raised significant concerns regarding “conglomerate” market power. Beef processors have been merging with pork and/or poultry processors (and vice versa). Concurrently, consumers have changed their attitude toward diet and health. The poultry industry has been more responsive to the changes in consumers’ lifestyles than the red meat industry by providing products which address health concerns. As a consequence, consumers exhibit stronger preference for chicken and are more willing to substitute chicken for red meat. The objective of this study is to examine the sustainability of collusion between multiproduct meat processing firms, under different values of the own-price demand flexibility of chicken as well as cross-price elasticities of demand between the markets of chicken and red meat. The findings indicate that the less (more) responsive demand for chicken gets to changes in its own price (price of red meat), the easier it gets for firms to sustain collusion.

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