Politics and the FTC

FTC Hart-Scott-Rodino Merger Enforcement Decision Analysis

The model uses summary data on the FTC's Bureau of Competition (BC) and Bureau of Economics(BE), along with a zero/one index for efficiencies associated with the market(s) of competitive concern. Information is also required on the value of the transaction. Finally, enter 1 for Clinton and 0 for democratic share in Congress for predictions until 1/2001

Click on open cells to input Parameters into javascript program, then obtain estimates of enforcement probabilities by clicking on calculate statements. The user can select a result with or without political considerations. (Click on the input variable description to obtain more details on the variable.)

Explanation of Data Requirements

Example of Valid Input Parameters

Input Relevant Data
BC indicator on concentration, barriers, effects; range 0-3
BE indicator on concentration, barriers, effects; range 0-3
efficiency dummy variable; binary so either 0 or 1
value is the transaction price in millions of nominal dollars
clin is dummy for Clinton Administration; binary so either 0 or 1
dem is the percentage of democrats in Congress in REPUBLICAN administration
The model uses publically released coefficient estimates contained in Coate, "Merger Enforcement at the Federal Trade Commission in Three Presidential Administrations" Antitrust Bulletin (Summer 2000))

The user should keep in mind that the political variables are statistically significant in explaining the outcome when choosing between the specifications.

Caution must be used in predicting merger outcomes for a Republican President serving with a Republican Congress, because that situation never occured in the sample data.