Proposed Merger Between Staples and Office Depot Leads to Concerns of Higher Prices
Michael Baye and Patrick Scholten prepared this case to serve as the basis for classroom discussion rather than to represent economic or legal fact. The case is a condensed and slightly modified version of the public copy of the FTC’s motion for a temporary restraining order and preliminary injunction against the proposed merger between Staples and Office Depot dated April 10, 1997. No 1:97CV00701.
1. How would you classify the office superstore industry? Who are the competitors? What are the characteristics of this industry that lead to this conclusion?
2. How is the Herfindahl-Hirschman Index (HHI) affected by the merger? Why does the case list a range, instead of an exact number? Are the HHI levels in the case indicative of high industry concentration?
3. What arguments have Staples and Office Depot made in defense of the proposed merger?
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