Authors libby rittenberg 883

Company Market share (percent)
Dr Pepper

7

7-Up

6

1. Calculate the Herfindahl–Hirschman Index (HHI) for the industry as it
was structured in 1986.
2. Calculate the postmerger HHI if only PepsiCo had bought 7-Up.
3. Calculate the postmerger HHI if only Coca-Cola had bought Dr Pepper.
4. How would you expect the Justice Department to respond to each
merger considered separately? To both?
(By the way, the proposed mergers were challenged, and neither was
completed.)
[1] See Carolyn Cox and Susan Foster, “The Costs and Benefits of Occupational
Regulation,” Federal Trade Commission, October 1990, p. 31.
[2] W. Kip Viscusi, “The Lulling Effect: The Impact of Protective Bottlecaps on
Aspirin and Analgesic Poisonings,” American Economic Review 74(2) (1984):
324–27.

Attributed to Libby Rittenberg and Timothy Tregarthen
Saylor URL: />
Saylor.org

883