Sequential Mergers and Antitrust Authority¿s Decisions in Stackelberg Markets

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

Authors

Cunha, M (Author) Other; Helder Vasconcelos (Author) FEP

Journal

Title: Journal of Industry, Competition and Trade

Vol. 8 No. 2

Pages: 1-22

ISSN: 1566-1679

Publisher: Springer Nature

Indexing

ISI Web of Knowledge - 0 Citations

Scopus - 1 Citation

Other information

Authenticus ID: P-00N-HTT

DOI: 10.1007/s10842-017-0268-x

Abstract (EN): This paper analyses a sequential merger formation game in a setting where: (i) firms compete à la Stackelberg; (ii) mergers may give rise to endogenous efficiency gains; and (iii) every merger has to be submitted for approval to the Antitrust Authority (AA). Two different types of AA are studied: first, we assume a myopic AA, which accepts or rejects a given merger without considering that this merger may be followed by other mergers; and, second, a forward looking AA, which anticipates the final industry structure a merger will give rise to, if approved. We conclude that these two types of AA adopt similar decisions whenever a merger would not trigger the exit of outsider firms. Their decisions are, however, shown to be very different when evaluating exit-inducing merger proposals. © 2018 Springer Science+Business Media, LLC, part of Springer Nature

Language: English

Type (Professor's evaluation): Scientific