Horizontal Mergers in Spatially Differentiated Noncooperative Markets

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We present a Cournot-Nash model of horizontal mergers between firms that engage in spatial price discrimination. The model extends the analysis of such mergers as presented in the US Department of Justice Merger Guidelines. Rather than conclude the evaluation of such a merger with an estimate of the post-merger HHI, as is done in the Merger Guidelines, our model yields an estimate of the increases in the equilibrium, post-merger delivered prices caused by the merger.