Review of Industrial Organization (2005) 27:279–301 © Springer 2005
Empirical Analysis of Merger Enforcement
Under the 1992 Merger Guidelines
MALCOLM B. COATE
Bureau of Economics, Federal Trade Commission, Washington, DC 20580, USA
Abstract. This paper presents an analysis of merger enforcement at the Federal Trade
Commission under the 1992 Merger Guidelines. The econometric analysis suggests that
enforcement decisions are best predicted with the Herﬁndahl index when the relevant the-
ory is collusion and the number of signiﬁcant rivals when the relevant theory is unilateral
effects. Evidence such as “hot” documents, customer complaints, and historical events sug-
gestive of past competitive problems also increase the chance of a challenge. Mirror image
considerations suggestive of continued post-merger competition (“cold” documents, customer
support, and procompetitive events) reduce the probability of challenge in one speciﬁcation.
Key words: Antitrust, coordinated interaction, impact of entry, merger policy, unilateral effects.
The use of econometrics to explain antitrust enforcement decisions dates back
to a series of academic papers in the 1990’s (Coate et al., 1990; Weir, 1992;
Khemani and Shapiro, 1993). While data on the enforcement outcomes are
readily available, information on the variables that drive the relevant decisions
is often difﬁcult to obtain. The analyst is left grasping for a few available vari-
ables and hoping the computer can sort out the bureaucratic realities.
This paper provides a more detailed evaluation of the decision-making
process, by focusing the analysis on a sub-set of mergers studied by the
This article is based on non-public data obtained from Federal Trade Commission
internal ﬁles. The Commission’s General Counsel has authorized publication of such data
in aggregated form under Commission Rule 4.11(g), 16 C.F.R. 4.11(g). I would like to
thank David Scheffman, Paul Pautler, Elizabeth Callison, and Jeffrey Fischer for help-
ful comments on the project and Anthony Alcorn, Brian Cross, Fulvio Cajina, Paul
Golaszewski, Wendy Hanson, Janet Ireland, Karl Kindler, Michael Madigan, Madeleine
McChesney, Joseph Remy, and especially Matthew Tschetter for research assistance in
assembling the data. Of course, the analyses and conclusions set forth in this paper
remain those of the author and do not necessarily represent the views of the Federal
Trade Commission, any individual Commissioner, or any Commission Bureau.