OPTIMAL MERGER POLICY: ENFORCEMENT VS. DETERRENCE -super-*
AbstractThe purpose of this article is to investigate the optimal merger policy in the presence of deterrence as of well as of type I and type II errors. We consider the optimal number of merger investigations, both when the competition authorities commit to a particular activity level and when they do not commit. If they commit, it is shown that the low quality of final decisions may lead to the deterrence of mergers that would have been welfare improving. On the other hand, when potential mergers with the largest negative impact on welfare are deterred, we find that the merger investigations themselves might have a negative impact on welfare (enforcement effect). It is shown that the absence of commitment can lead to a less active merger policy and lower welfare than what is the case if the authority did commit to a certain level of activity. The results have important implications for how one should interpret the empirical studies of the effects of merger enforcement. Copyright 2009 The Authors. Journal compilation 2009 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Wiley Blackwell in its journal The Journal of Industrial Economics.
Volume (Year): 57 (2009)
Issue (Month): 3 (09)
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Andreea Cosnita-Langlais & Jean-Philippe Tropeano, 2011.
"Fight Cartels or Control Mergers? On the Optimal Allocation of Enforcement Efforts within Competition Policy,"
EconomiX Working Papers
2011-18, University of Paris West - Nanterre la DÃ©fense, EconomiX.
- Cosnita-Langlais, Andreea & Tropeano, Jean-Philippe, 2013. "Fight cartels or control mergers? On the optimal allocation of enforcement efforts within competition policy," International Review of Law and Economics, Elsevier, Elsevier, vol. 34(C), pages 34-40.
- Andreea Cosnita & Jean-Philippe Tropeano, 2013. "Fight Cartels or Control Mergers? On the Optimal Allocation of enforcement Efforts within Competition Policy," PSE - Labex "OSE-Ouvrir la Science Economique", HAL hal-00977619, HAL.
- Andreea Cosnita-Langlais & Lars SÃ¸rgard, 2014.
"Enforcement vs Deterrence in Merger Control: Can Remedies Lead to Lower Welfare?,"
EconomiX Working Papers
2014-29, University of Paris West - Nanterre la DÃ©fense, EconomiX.
- Cosnita-Langlais, Andreea & SÃ¸rgard, Lars, 2014. "Enforcement vs Deterrence in Merger Control: Can Remedies Lead to Lower Welfare?," Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics 7/2014, Department of Economics, Norwegian School of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.