Rebekah Dix

Thesis Writer

Research Fields

Industrial Organization

Contact Information

Phone 715-441-8182
Email Address
Research Fields Industrial Organization Innovation Health Economics

Working Papers

1. Input-Price Responses to Horizontal Mergers and the Bargaining-Leverage Defense (with Todd Lensman), September 2022

Abstract: We study the implications of endogenous input prices for horizontal merger policy when input prices are set before goods prices. Generalizing the first-order approach of Farrell and Shapiro (2010) and Jaffe and Weyl (2013), we derive a measure of unilateral incentives to adjust input prices after a downstream merger, Input Pricing Pressure. We use this measure to show that mergers often incentivize higher input prices, and that these incentives hinge on changes in downstream pass-through rates and marginal cost efficiencies generated by the merger. By implication, consumer surplus-maximizing antitrust policy may be too lax when input prices are assumed fixed, and it should be biased against claims that input prices will fall after a downstream merger. In an empirical application to local retail beer markets, endogenizing input prices substantially raises the consumer harm from mergers of retailers.

2. Market Power Spillovers Across Airline Routes (with Roi Orzach), January 2023

Abstract: Airlines often route connecting passengers through hubs. Despite the prevalence of connecting service, research analyzing the welfare effects of changes in competition focuses on nonstop routes. We show that when firms face capacity constraints or adjustment costs, a price decrease on a direct route may incentivize firms to decrease prices on indirect routes using this route as a leg. We call this relationship pass-through and document positive pass-through after entry by low-cost carriers and mergers. We show that ignoring these effects results in underestimating the consumer surplus effects of changes in competition between 9 and 115% across different competition shocks.