Abstract
In a classic article, Oliver Williamson introduced the efficiency defense to antitrust merger analysis. In this article, I extend his analysis to mergers among buyers that may create monopsony power. When such mergers are accompanied by merger-specific efficiencies, there is necessarily a welfare tradeoff. Evaluating the impact of the merger on social welfare requires a comparison of the cost savings that can be realized only without the merger and the allocative inefficiency due to the exercise of monopsony power.
Get full access to this article
View all access options for this article.