Fernando Luco

Assistant Professor of Economics, Texas A&M University

My research is on industrial organization and competition policy (antitrust). You can learn more about me and my work by downloading my CV, checking the papers below, or visiting my Google Scholar profile.


The 2020 Vertical Merger Guidelines assume that the elimination of double marginalization caused by vertical integration is procompetitive. We analyze equilibrium effects of vertical integration to shed light on when EDM may fail to be procompetitive in multiproduct industries. Diagnosing Anticompetitive Effects of Vertical Integration by Multiproduct Firms with Guillermo Marshall pdf.

Reducing uncertainty about future wholesale prices may reduce firms' incentives to coordinate, and it reduces these incentives the most in markets with stronger leaders. Price Leadership and Uncertainty about Future Costs with Jorge Lemus pdf | SSRN | Forthcoming at the Journal of Industrial Economics.

Vertical mergers by multiproduct firms raise anticompetitive pricing incentives. We call this the Edgeworth-Salinger effect and show that it counteracts procompetitive effects of vertical mergers. We call for the E-S effect to be explicitly considered in antitrust enforcement. The Competitive Impact of Vertical Integration by Multiproduct Firms with Guillermo Marshall pdf | slides | doi | American Economic Review, 110 (7): 2041-64.

Heterogeneity in strategic sophistication may lead to inefficient market outcomes and high prices even without exploitation of market power. Mergers between heterogeneous firms may, however, improve efficiency even if they increase concentration and do not generate cost synergies. Does Strategic Ability Affect Efficiency? Evidence from Electricity Markets with Ali Hortaçsu, Steve Puller and Dongni Zhu pdf | slides | doi | American Economic Review, 109 (12): 4302-42.

Switching costs induce inertia in consumer behavior and often result in consumers paying high prices. Understanding what causes them informs policy design and may induce more intense competition between firms. Switching Costs and Competition in Retirement Investment pdf | doi | AEA Research Highlights | American Economic Journal: Microeconomics, 11 (2): 26-54.

Information disclosure may increase or decrease the intensity of competition and it may have important distributional effects. Who Benefits from Information Disclosure? The Case of Retail Gasoline pdf | doi | American Economic Journal: Microeconomics, 11 (2): 277-305.


Antitrust and Economic Regulation (undergraduate)

Industrial Organization (graduate)


Interactive Online IO Seminar, aka (IO)^2 Fall 2020, Spring 2021 (open to everyone)


E-mail: fluco [at] tamu [dot] edu

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