When firm sizes are distributed according to the Pareto law, mergers or acquisitions may either increase or decrease business concentration as measured by the slope, on a double-log scale, of the distribution. Whether mergers and acquisitions will increase or decrease concentration depends upon the size distribution of the acquired assets among the firms that survive. Some data from the U.S. economy are consistent with a set of conditions under which industrial concentration is unaffected by mergers, thus offering an explanation for the observed fact that the overall concentration of U.S. firms, as measured by the slope of the Pareto curve, has not changed substantially since the turn of the century. The findings challenge the widely held view that mergers held view that mergers "obviously" increase concentration and reduce competition.

The front matter of the December 2013 issue contains the Table of Contents