Aviv Nevo’s contributions to economics during his distinguished career have equipped policymakers to think critically about regulatory and competition policy across many industries.
Professor Nevo has been a pioneer in the antitrust and competition field, developing and popularizing sophisticated econometric tools that have been seminal for contemporary merger review.
Professor Nevo’s early work helped lay the foundation for contemporary merger review and analysis. In “Mergers with Differentiated Products: The Case of the Ready-to-Eat Cereal Industry,” he added to a nascent literature on merger simulation that brought new techniques to the merger practitioner’s toolkit. Prior to this article and related publications, merger review relied on measures of concentration in predefined antitrust markets—mergers in markets that exceeded certain concentration thresholds were presumed to create anticompetitive effects and were therefore deemed illegal. This rigid framework was ill-suited to many industries, especially those with closely related but not identical products.
Professor Nevo’s work has helped to lay the foundation for contemporary merger review and analysis.
Professor Nevo’s paper was at the forefront of a body of scholarship that showed how to incorporate empirical models of consumer demand into game-theoretic models of firm supply. This synthesis of models of consumer demand and firm supply—the merger simulation approach—allowed predictions of the extent to which prices might rise following a merger, even in industries characterized by differentiated products. The merger simulation approach supplemented existing concentration measures and helped merger practitioners to make more refined assessments of likely competitive effects.
In addition, Professor Nevo has helped make the merger simulation approach more accessible (“A Practitioner’s Guide to Estimation of Random‐Coefficients Logit Models of Demand”). Today, this approach is part of the core toolbox of antitrust economics, and has been extended to different situations. For example, Professor Nevo extended the framework to cases where prices are negotiated (“Mergers When Prices Are Negotiated: Evidence from the Hospital Industry”). These papers are considered part of the core curriculum of leading graduate economics programs in industrial organization and competition. Further, Professor Nevo’s work on consumer preferences has provided economists and policymakers with new cutting-edge tools for estimating demand.
In addition to his foundational contributions to the competition policy toolkit, Professor Nevo is a leading scholar on the economics of many industries, and he pushes the frontiers of policy-relevant economic analysis. For example, he has analyzed what can be learned from merger retrospectives, addressed network externalities in the mobile app space, researched economic solutions to broadband congestion, and studied a variety of competition issues involving broadband internet service. Professor Nevo continues to be one of the world’s most influential scholars in competition analysis and regulatory policy.