<p>When Anthem Insurance acquired Cigna Insurance in July 2015, this reduced consumer choice and possibly transferred negotiating power from the consumer to the insurance provider.  But the merger also probably conferred some economic benefit on society by increasing the economy of scale.</p>

<p>These two possible effects are opposed from the perspective of the consumer.  The consumer benefits from the economy of scale, but the consumer loses when negotiating power is reduced.  So one could say the merger had good and bad effects to the consumer.</p>

<p>What is the net effect of the merger from the perspective of the consumer?  Are consumers better off when mergers occur?  Obviously monopolies are not good for consumers, so at what point do mergers approach monopolies and no longer have a net benefit to society?</p>

CC BY-SA 3.0
2015-08-01T13:57:53.617Z
In general, consumers have no say and are strictly worse off. The rest is legalese BS to keep you happy.
Deer Hunter
CC BY-SA 3.0
2015-08-02T11:39:16.077Z
Are the consumers always worse off, or are there situations where things like economies of scale really to benefit everyone in society?  Could you please extend this into an answer?
steampowered
<consumer-theory>
Net effects of mergers from consumers' perspective
steampowered
# Net effects of mergers from consumers' perspective

(Asked by: username_0 on 2015-07-24)

When Anthem Insurance acquired Cigna Insurance in July 2015, this reduced consumer choice and possibly transferred negotiating power from the consumer to the insurance provider. But the merger also probably conferred some economic benefit on society by increasing the economy of scale.

These two possible effects are opposed from the perspective of the consumer. The consumer benefits from the economy of scale, but the consumer loses when negotiating power is reduced. So one could say the merger had good and bad effects to the consumer.

What is the net effect of the merger from the perspective of the consumer? Are consumers better off when mergers occur? Obviously monopolies are not good for consumers, so at what point do mergers approach monopolies and no longer have a net benefit to society?

**Tags:** consumer-theory

> **Comments:**
> **username_1**: In general, consumers have no say and are strictly worse off. The rest is legalese BS to keep you happy.  
> **username_0**: Are the consumers always worse off, or are there situations where things like economies of scale really to benefit everyone in society?  Could you please extend this into an answer?  

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## 0 answers

