Killer Acquisitions

  title={Killer Acquisitions},
  author={Colleen M. Cunningham and Florian Ederer and Song Ma},
  journal={IRPN: Innovation \& Organizational Economics (Topic)},
This paper argues incumbent firms may acquire innovative targets solely to discontinue the target's innovation projects and preempt future competition. We call such acquisitions "killer acquisitions." We develop a model illustrating this phenomenon. Using pharmaceutical industry data, we show that acquired drug projects are less likely to be developed when they overlap with the acquirer's existing product portfolio, especially when the acquirer's market power is large due to weak competition or… Expand
23 Citations
Antitrust Limits on Startup Acquisitions
Should there be limits on startup acquisitions by dominant firms? Efficiency requires that startups sell their technology to the right incumbents, that they develop the right technology, and thatExpand
Antitrust and Innovation: Welcoming and Protecting Disruption
The goal of antitrust policy is to protect and promote a vigorous competitive process. Effective rivalry spurs firms to introduce new and innovative products, as they seek to capture profitable salesExpand
Platform Mergers and Antitrust
Platform ecosystems rely on economies of scale, data-driven economies of scope, high quality algorithmic systems, and strong network effects that typically promote winner-take-most markets. SomeExpand
Acquisitions of Potential Competitors: The U.S. Approach and Calls for Reform
This Article begins with a discussion of the U.S. approach to analyzing acquisitions of potential competitors. We explain the need for exacting standards, including due to the increased difficultiesExpand
Acquisitions for Sleep
Abstract Within the policy debate, there is a fear that large incumbent firms buy small firms’ inventions to ensure that they are not used in the market. We show that such “acquisitions for sleep”Expand
Increasing Market Power and Merger Control
A significant body of empirical research has documented a structural increase in margins across a wide range of industries and countries. This article analyses the potential implications of thisExpand
Incentives and disincentives to drug innovation: evidence from recent literature
The drug value chain is price-sensitive to the balance of incentives and disincentives to innovation, and American health policy should consider charting a middle course that introduces some form of regulatory price control, while stimulating and sustaining the benefits of market competition. Expand
Merger Policy in Digital Markets: AnEx PostAssessment†
This paper presents a broad retrospective evaluation of mergers and merger decisions in the digital sector. We first discuss the most crucial features of digital markets such as network effects,Expand
Innovating Big Tech Firms and Competition Policy: Favoring Dynamic Over Static Competition
This paper gives a fresh account of competition in the digital economy. Our understanding is that usual static monopoly narratives paint with too broad a brush. We suggest that some leading firms inExpand
Mergers and Managers: Manager-Specific Wage Premiums and Rent Extraction in M&As
This paper shows that some managers systematically pay higher wages to rank-and-file workers and these managers are targets of M&As. We use a manager-firm-worker matched dataset covering theExpand