One of the most controversial merger policy decisions during the Bush administration was the DOJ’s failure to bring a complaint against the Whirlpool/Maytag merger. Indeed, the decision was even criticized by Carl Shapiro, the economic expert retained by the DOJ on the case. Jonathan Baker and Carl Shapiro summarize this conclusion as follows: “The March 2006 decision by the DOJ not to challenge Whirlpool’s acquisition of Maytag was a highly visible instance of underenforcement.” Orley Ashenfelter, Daniel Hosken and Matthew Weinberg have now posted a working paper that estimates the price effects of the merger. Using scanner data, the authors compare the prices of Whirlpool and Maytag appliances to price changes in the appliance markets most affected by the merger to other markets less or not affected. They find large significant price increases for clothes dryers and dishwashers, but not for refrigerators and washing machine.
Cite this Article
Steve Salop, Was the Whirlpool/Maytag Merger Anticompetitive After All?, Truth on the Market (November 02, 2011), https://truthonthemarket.com/2011/11/02/was-the-whirlpoolmaytag-merger-anticompetitive-after-all/