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Figure 8
Merger Settlements

Case Product Number of
Firms
HHI/Delta Plus Factors
Georgia-Pacific/
Domtar (1996)
Gypsum board Merger of 3rd
and 4th firms in
4-to-3 market
2700/400 Homogeneous products
Inelastic demand
History of coordination
Price signaling
Information exchange
New Holland/
Case (1999)
Tractors, balers,
and windrowers
Multiple 5-to-4
and 4-to-3
markets
2885- 4460/
510-995
Facilitating practices
History of tacit coordination
Information exchange
Eliminate maverick
Earthgrains/Metz (2000) White pan bread Two 3-to-2
and one 4-to-3
market
3400-3800/
875-1530
Homogeneous products
Inelastic demand
Stable demand and regular purchases
Eliminate maverick
History of coordination
Alcoa/Reynolds
(2000)
Smelter and
chemical grade
alumina
SGA: 6-to-5
CGA: 5-to-4
SGA: 1800/531
CGA: 4222/1460
Homogeneous product
Inelastic demand
History of signaling
History of coordination
Transparent information
Reynolds potential maverick
Alcoa excess capacity
Premdor/Masonite
(2001)
Residential
doors
3-to-2
upstream
market
N/A Increased firm homogeneity
Eliminate maverick
History of coordination
Suiza/Broughton
(1999)
School milk Multiple 3-to-2
markets defined
as single school
districts
5,000/
1,667
Inelastic demand
History of coordination
Public bid markets
Multimarket contacts