Past empirical research has associated higher prices (and potentially profits) with less
concentrated hospital markets. This has led to consternation among policymakers who must
decide whether or not to apply traditional antitrust guidelines to hospital mergers. Due to the
inherent flaws of accounting data, an 'event study'methodology is used to examine the
effects of merger related announcements on the competitors' stock price returns. The results
provide evidence that events which promote mergers increase the profits of competitors …