Review of Industrial Organization 23: 121–155, 2003.
© 2003 Kluwer Academic Publishers. Printed in the Netherlands.
Economic Analyses of Mergers at the FTC: The
Cruise Ships Mergers Investigation
MARY T. COLEMAN, DAVID W. MEYER and DAVID T. SCHEFFMAN
LECG, LLP, 1725 Eye Street, NW, Suite 800, Washington DC 20006, U.S.A.
Abstract. This paper provides an overview of how economists at the Federal Trade Commission
assess the potential competitive effects of mergers, with a focus on the types of quantitative analyses
frequently employed. The paper ﬁrst outlines the general approach employed at the Federal Trade
Commission to review mergers. The paper then describes analyses done in the investigation of pro-
posed mergers in the cruise line industry as a speciﬁc example. Of particular interest in this example
are the analyses used to assess the potential for coordinated interaction as a result of the merger.
Key words: Antitrust, FTC, mergers, competitive analysis.
In this paper we provide an overview of how economists at the Federal Trade Com-
mission (FTC) assess the potential competitive effects of mergers and provide, as
a speciﬁc example, some of the economic analyses conducted in connection with
the FTC’s cruise ships merger investigation. We believe that industrial organization
economists should ﬁnd this paper of interest, in part, because it represents a com-
prehensive discussion of what FTC economists “do” in a merger investigation and
elaborates by discussing a recent example.
The paper is also of interest because
it demonstrates various empirical analyses relevant to assessing whether a merger
is likely to be anticompetitive due to the creation or enhancement of coordinated
Dr. Coleman is the Deputy Director for Antitrust in the Bureau of Economics at the Federal
Trade Commission. Dr. Meyer is a staff Economist at the Federal Trade Commission. Dr. Scheffman
was the Director of the Bureau of Economics at the Federal Trade Commission during the cruise ships
investigation and when this article was written. He is now adjunct professor of marketing and strategy
at the Owen Graduate School of Management at Vanderbilt University and an economic consultant
with LECG, LLP. The views and opinions expressed in this paper are those of the authors and are
not necessarily those of the Commission or any individual Commissioner. We thank Michelle Kam-
bara, Karl Kindler, and Stephen Tuohy for excellent research assistance, and our colleagues James
Ferguson, Jeffrey Fischer, Elizabeth Schneirov, Charlotte Manning, Elizabeth Callison, Lawrence
White, and James Langenfeld for their assistance and comments.
Because of space limitations and conﬁdentiality issues, we can only highlight major issues and
provide some examples of the sorts of analyses that FTC economists conducted in connection with