EFFICIENCY GAINS AND STRUCTURAL REMEDIES IN MERGER CONTROL*

• Type: Article in International Scientific Journal
• Date: 2010

Authors

Helder Vasconcelos (Author) FEP

Journal

Title: Journal of Industrial Economics

Vol. 58 No. 4

Pages: 742-766

ISSN: 0022-1821

Publisher: Wiley-Blackwell

Indexing

ISI Web of Knowledge - 27 Citations

ISI Web of Science

Scopus - 27 Citations

Econlit

Scientific classification

FOS: Social sciences > Economics and Business

Associated Projects

PTDC/EGE-ECO/099784/2008 - Modelos em "Antitrust Economics"

Other information

Authenticus ID: P-003-07D

DOI: 10.1111/j.1467-6451.2010.00436.x

Abstract (EN): This paper studies the role of structural remedies in merger control in a Cournot setting where (endogenous) mergers are motivated by prospective efficiency gains and must be submitted to an Antitrust Authority (AA) which might require partial divestiture for approval. From a merger policy perspective, this paper's main contribution is two-fold. First, it shows that if mergers do not involve all firms in the industry, then merger remedies help the AA to increase consumer surplus only if assets are divested to competitors already in the market. Second, it presents a model which clarifies that there can only exist social costs to 'over-fixing' the anticompetitive effects of a merger if merger review policy treats mergers as one-time events. When a more dynamic view is taken of sequential merger review, then there can never be an 'over-fixing' problem. In this case, however, remedies are shown to be needed to make myopic merger review optimal.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 25