GIULIANO MUSSATI Why do mergers occur, which are their effects on social welfare and which is the best economic policy toward them? These three questions have been puzzling industrial economists since the end of the last century when the first great merger wave has come about in the US. They have returned at the centre of the stage of the theoretical and empirical economic research during the last decade when merger and acquisition activity became one of the most evident firms' activities in all industrialised countries, being fostered by some general and country specific facts. These facts have been identified in the appearance of new financial instruments facilitating fund raising by firms, in the benevolent behaviour of the authorities in charge of competition policy during the Reagan administration in the US, while inter nal market completion has become a strong incentive for European firms to reach a true continental dimension in the UE through external growth. However a robust and univocal answer to these questions has not yet been found in spite of its importance not only from the theoretical point of view, but also from the normative one. In fact the correct identification of firms' motivations in pursuing merger and acquisition operations and of their consequences on social welfare would help the choice by administra tive authorities of different possible options in competition and industrial policies.

As a veteran of both the Bureau of Economics of the Federal Trade Commission and the Senate Subcommittee on Antitrust and Monopoly during the 1960s, author Blair is an advocate. His advocacy of his position is clear, concise, and understandable: he favors strong antitrust laws and the stricter application of those laws to existing corporate structures, and this is his argument. First, it defines and discusses four types of economic concentration-market, vertical, conglomerate, and aggregate. Second, high concentration (as opposed to diffusion of control) is shown to be neither the necessary nor the "natural" state of the economy because "centrifugal" forces (eventual diseconomies of scale, growth, and technological change) constantly are chipping away at dominance and ossification. Third, it argues that the primary causes of high and rising concentration of various kinds are neither natural nor technological imperatives (economies of scale, technological change): rather, they are artificial and unnecessary "centripetal" factors, the most important being mergers, acquisitions, TV advertising, predation, and anticompetitive government policies of various kinds. The result, therefore, is a work rich in empirical information and skillful in interpreting and verifying new data and statistical approaches; moreover, it integrates a substantial quantity of data never attempted in this area in the past. In this sense it is an excellent contribution. No topic considered has been shortchanged, the treatment is competent. But the effort to cover the entire waterfront leaves several urgent questions: What can be done and where? How may we attempt new approaches to our subject? How may we first better convince the general public and Congress that, indeed, a strong antitrust policy is desirable?

Discusses the appropriateness of mergers such as acquisitions of Conoco and Marathon Oil Corporation and of their impact on the American economy. The author argues in favour of a natural government merger policy. He believes that mergers do not result in an excessive concentration of the American economy, that the present restrictive policy is at odds with that of the countries with which the U.S. competes, that mergers may allow American companies to become large enough to compete effectively in international trade and improve the management of poorly managed assets.

Firmly rooting its argument in democratic and economic theory, the book argues that a more democratic distribution of communicative power within the public sphere and a structure that provides safeguards against abuse of media power provide two of three primary arguments for ownership dispersal. It also shows that dispersal is likely to result in more owners who will reasonably pursue socially valuable journalistic or creative objectives rather than a socially dysfunctional focus on the 'bottom line'. The middle chapters answer those agents, including the Federal Communication Commission, who favor 'deregulation' and who argue that existing or foreseeable ownership concentration is not a problem. The final chapter evaluates the constitutionality and desirability of various policy responses to concentration, including strict limits on media mergers.

After examining 100 separate media and network industries in detail, Noam provides a powerful summary and analysis of concentration trends across industries and major media sectors. He also looks at local media power, vertical concentration, and the changing nature of media ownership through financial institutions and private equity.