y Unilateral effects screens for partial horizontal acquisitions: The generalized HHI and GUPPI

• Type: Article in International Scientific Journal
• Date: 2018

Authors

Brito, D (Author) Other; Osorio, A (Author) Other; Ribeiro, R (Author) Other; Helder Vasconcelos (Author) FEP

Journal

Title: International Journal of Industrial Organization

Vol. 59

Pages: 127-189

ISSN: 0167-7187

Publisher: Elsevier

Indexing

ISI Web of Knowledge - 20 Citations

Scopus - 20 Citations

Other information

Authenticus ID: P-00N-VN4

DOI: 10.1016/j.ijindorg.2018.03.005

Abstract (EN): Recent years have witnessed an increased interest, by competition agencies, in assessing the competitive effects of partial acquisitions. We propose a generalization of the two most traditional indicators used to screen unilateral anti-competitive effects - the HerfindahlHirschman Index and the Gross Up- ward Price Pressure Index - to partial horizontal acquisition settings. The proposed generalized indicators are endogenously derived under a probabilistic voting model in which the manager of each firm is elected in a shareholder assembly between two potential candidates who seek to obtain utility from an exogenous rent associated with corporate office. The model (i) can cope with settings involving all types of owners and rights: owners that can be internal to the industry (rival firms) and external to the industry; and rights that can capture financial and corporate control interests, can be direct and indirect, can be partial or full, (ii) yields an endogenous measure of the owners ultimate corporate control rights, and (iii) can also be used - in case the potential acquisition is inferred to likely enhance market power - to devise divestiture structural remedies. We also provide an empirical application of the two proposed generalized indicators to several acquisitions in the wet shaving industry, with the objective of providing practitioners with a step-by-step illustration of how to compute them in antitrust cases.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 63