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Merger Simulation In An Open Economy

Author

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  • CHOI, JAY PIL
  • NAHM, JAE

Abstract

Recently, competition authorities use merger simulation tools to predict the effects of a merger on price, consumer welfare and social welfare. However, since standard merger simulation tools are developed to predict those effects in a closed economy, they do not consider the role of exports in evaluating merger effects. In an open economy or export-oriented economy, a typical manufacturing industry exhibits quite high shares of export volumes. The welfare effects of merger could be quite different between an open economy and a closed economy. In an open economy, we need to consider exports in evaluating merger effects, and this article provides a framework on how to incorporate the role of exports in a standard Cournot merger simulation model.

Suggested Citation

  • Choi, Jay Pil & Nahm, Jae, 2016. "Merger Simulation In An Open Economy," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 57(1), pages 53-66, June.
  • Handle: RePEc:hit:hitjec:v:57:y:2016:i:1:p:53-66
    DOI: 10.15057/27939
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    References listed on IDEAS

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    1. Baker, Jonathan B & Rubinfeld, Daniel L, 1999. "Empirical Methods in Antitrust Litigation: Review and Critique," American Law and Economics Review, American Law and Economics Association, vol. 1(1-2), pages 386-435, Fall.
    2. Jonathan B. Baker, 1999. "Policy Watch: Developments in Antitrust Economics," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 181-194, Winter.
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    Cited by:

    1. Pierre Bernhard & Marc Deschamps, 2020. "Le Modèle de Cournot avec entrées aléatoires de firmes," SciencePo Working papers Main hal-03547666, HAL.

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    More about this item

    Keywords

    merger simulation; open economy; merger evaluation;
    All these keywords.

    JEL classification:

    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • M3 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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