Mergers in the Presence of Adverse Selection

• 成果类型: Article
• 署名作者: Ryan, Conor
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.70070
• 发表日期: 2026
• 关键词: SERVICE-LEVEL SELECTION; health-insurance; imperfect competition; information frictions; risk adjustment; WELFARE IMPACT; subsidies; MARKETS; demand; CHOICE

摘要

In the presence of adverse selection, mergers can increase welfare through a reduction in inefficient sorting. I characterize the sorting externality internalized between merging firms in a tractable discrete choice model. Mergers benefit consumers when the firms are small, willingness to pay is moderately increasing in cost, and consumer costs are skewed. Applying the model to the non-group health insurance market, 13% of potential mergers would improve consumer surplus. In markets where the sorting distortion exceeds $5 per person, nearly one-third of mergers improve consumer surplus, highlighting the importance of considering adverse selection in merger evaluation.