Common Ownership in the Merger Guidelines

Common ownership is a puzzle. There are now sixteen studies that find that higher levels of common ownership are associated with higher prices. But the government has not challenged common ownership and the new Merger Guidelines devote little attention to the issue. This essay argues that the agencies and the Guidelines ought to take a more muscular approach. The essay defines common ownership, describes the empirical support for action, and addresses the principal counterarguments. The most imp