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Complementarities as an antitrust defense

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  • Dennis L. Weisman

    (5308Kansas State University, USA)

Abstract

We employ a Cournot model with interdependent demands to explore the interaction between demand and cost complementarities in mitigating upward pricing pressure, post-merger. The analysis reveals that even substantial increases in the HHI post-merger need not raise competitive concerns when output is redistributed from single-market to multi-market providers. Furthermore, the numerical simulations indicate that there is a wide range of demand and cost complementarity parameters over which even monopolization of the market would not be expected to result in higher prices. These findings may constructively inform merger policy and provide useful context for application of the DOJ/FTC horizontal merger guidelines in an increasingly digitized (network) economy.

Suggested Citation

  • Dennis L. Weisman, 2020. "Complementarities as an antitrust defense," Competition and Regulation in Network Industries, , vol. 21(4), pages 344-366, December.
    • Handle: RePEc:sae:crnind:v:21:y:2020:i:4:p:344-366
    DOI: 10.1177/1783591720960424
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    References listed on IDEAS

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