Efficiency and competition: The reagan administration's legacy in merger policy

The full effects of the latest merger wave will not be evident for a number of years. Further, many forces other than the Reagan administration's permissive policy contributed to the surge in asset redeployment that characterized the 1980s. Nevertheless, the rationale for this policy should be evaluated as promptly as possible, since antitrust remains the nation's primary policy instrument for dealing with untoward effects of merger. Both empirical evidence and underlying theory contradict beliefs in the efficiency-enhancing character of most mergers and of the market for control. Several emerging and potential harmful effects are noted.