Painful Bargaining: Evidence from Anesthesia Rollups (WP-24-34)
Aslihan Asil, Paulo Ramos, Amanda Starc, and Thomas Wollmann
A rollup is a series of acquisitions through which a financial sponsor consolidates ownership. Increasingly, this strategy is shaping economically important markets, but historically, it has escaped antitrust enforcement. The researchers study this phenomenon in the anesthesia industry, site of the first rollup-based antitrust case in US history. First, they identify 18 other rollups that are observationally similar to the litigated ones. Next, they show that rollups consolidate ownership and that prices rise sharply as competing practices are acquired. Last, the researchers estimate a structural bargaining model and simulate counterfactual equilibria under remedies that courts are likely to consider.