On the desirability of an efficiency defense in merger control
Abstract: "We develop a model in which two firms that have proposed to merge are privately informed about merger-specific efficiencies. This enables the firms to influence the merger control procedure by strategically revealing their information to...
more
|
Abstract: "We develop a model in which two firms that have proposed to merge are privately informed about merger-specific efficiencies. This enables the firms to influence the merger control procedure by strategically revealing their information to an antitrust authority. Although the information improves upon the quality of the authority's decision, the influence activities may be detrimental to welfare if information processing/ gathering is excessively costly. Whether this is the case depends on the merger control institution and, in particular, whether it involves an efficiency defense. We derive the optimal institution and provide conditions under which an efficiency defense is desirable. We also discuss the implications for antitrust policy and outline a three-step procedure that take the influence activities into consideration." (author's abstract)
|
Consumer surplus vs. welfare standard in a political economy model of merger control
Abstract: "This paper considers merger control in a common agency framework where firms and their competitors can influence the antitrust agency and where transparency - while making lobbying less effective - also implies real resource costs. We...
more
|
Abstract: "This paper considers merger control in a common agency framework where firms and their competitors can influence the antitrust agency and where transparency - while making lobbying less effective - also implies real resource costs. We examine the performance of two alternative standards that can be assigned to the antitrust agency in the presence of these regulatory failures. We find that under a welfare standard, lobbying leads to the clearance of relatively inefficient mergers that decrease welfare (i.e. there is a type II error). By contrast, under a consumer surplus standard, the agency will ban relatively efficient mergers that would increase welfare (i.e. there is a type I error). Lobbying actually reduces the extent to which this occurs, albeit at a cost in terms of real resources. We also find that a consumer surplus standard is more attractive when mergers are large, when increasing the size of a merger greatly enhances industry profits, when there is little transparency
|
The scope of conflict in international merger control
Abstract: "In this paper, we analyse the scope for conflict between national merger control agencies which assert jurisdictions simultaneously. We consider a positive model of merger control in which market definition and the analysis of dominance...
more
|
Abstract: "In this paper, we analyse the scope for conflict between national merger control agencies which assert jurisdictions simultaneously. We consider a positive model of merger control in which market definition and the analysis of dominance are both explicitly specified. We find that conflict in international merger control is less likely to occur when economic integration is high. Hence, 'globalisation' should alleviate rather than exacerbate conflict. In addition, we observe that conflict is less likely to arise between countries of different size and for extreme policy rules (very lenient or very strict) towards dominance." (author's abstract)
|
