Among the insights from this research is that this airline merger would lead to a very concentrated market, with four firms commanding 80 percent of the market. Strong data from literally hundreds of studies suggests that level of concentration would very likely lead to monopoly pricing. That evidence and a very lengthy history of antitrust violations in the airline industry led the Department of Justice to seek to stop the merger.
I won’t predict the final outcome, but this is a good example where decades of thoughtful economic data collection and research (almost exclusively performed by economics and law professors) provided the Department of Justice the tools to protect consumers and competing businesses from monopoly behavior.
Michael J. Hicks, Ph.D., is director of the Center for Business and Economic Research and a professor of economics at Ball State University. Contact him at firstname.lastname@example.org.