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They played the merger game: A retrospective analysis in the UK videogames market

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  • Aguzzoni, Luca
  • Argentesi, Elena
  • Buccirossi, Paolo
  • Ciari, Lorenzo
  • Duso, Tomaso
  • Tognoni, Massimo
  • Vitale, Cristiana

Abstract

We study the effect of a merger in a dynamic high-technology industry - the videogame market - which is characterized by frequent introduction of new products. To assess the impact of the merger between two large specialist retailers in the UK, we perform a difference-in-differences analysis comparing the price evolution of the merging parties to that of their 7 major competitors on an original sample of 196 videogames belonging to six different consoles. The results of our econometric analyses suggest that there has been a reduction in the general level of prices of both new and pre-owned games after the merger. This decline has been more marked for the merging parties, which suggests that the merger between Game and Gamestation did not lead to a substantial lessening of competition; rather it is consistent with the existence of efficiency gains.

Suggested Citation

  • Aguzzoni, Luca & Argentesi, Elena & Buccirossi, Paolo & Ciari, Lorenzo & Duso, Tomaso & Tognoni, Massimo & Vitale, Cristiana, 2013. "They played the merger game: A retrospective analysis in the UK videogames market," DICE Discussion Papers 113, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    • Handle: RePEc:zbw:dicedp:113
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    References listed on IDEAS

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    1. Ricard Gil & Frederic Warzynski, 2015. "Vertical Integration, Exclusivity, and Game Sales Performance in the US Video Game Industry," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 31(suppl_1), pages 143-168.
    2. repec:pri:cepsud:140weinberg is not listed on IDEAS
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    Cited by:

    1. Franco Mariuzzo & Peter L. Ormosi, 2017. "Post-merger price dynamics matter, so why do merger retrospectives ignore them?," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2016-05, Centre for Competition Policy, University of East Anglia, Norwich, UK..

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    More about this item

    Keywords

    R&D; Ex-post Evaluation; Videogames market; Retail sector;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L44 - Industrial Organization - - Antitrust Issues and Policies - - - Antitrust Policy and Public Enterprise, Nonprofit Institutions, and Professional Organizations
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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