Mississippi State University
Coatney, Kalyn T.
Parman, Bryon J.
Tack, Jesse B.
Date of Degree
Graduate Thesis - Open Access
Master of Science
College of Agriculture and Life Sciences
Department of Agricultural Economics
The research is motivated by the significant increase in multiproduct mergers in the meat-protein processing sector, whereby the largest firms now process beef, pork, and chicken. This thesis conducts a theoretical merger analysis, accounting for both within- and across-submarket substitution of demand related goods. The model developed is suitable for analyzing markets in which there are identifiable consumer submarkets within a larger market. The results indicate two primary findings. The first finding is that Bertrand firms have a unilateral incentive to merge. Firms involved in a given merger increase profit, as well as those not included in the merger. Second, it is found that without sufficient realized scope economies by the merged firm, significant anticompetitive price increases are likely. However, as substitutability within and across submarkets tend towards each other in magnitude, the required cost reductions for welfare neutrality increase vastly. Additionally, guidelines for future empirical analysis are discussed.
Sanderson, Benjamin Lee, "A Theoretical Analysis of Multiproduct Mergers: Application in the Major Meat Processing Sectors" (2016). Theses and Dissertations. 327.