Tacit Collusion, Firm Asymmetries and Numbers: Evidence from EC Merger Cases
AbstractThe purpose of this paper is to identify empirically the implicit structural model, especially the roles of size asymmetries and concentration, used by the European Commission to identify mergers with coordinated effects (i.e. collective dominance). Apart from its obvious policy-relevance, the paper is designed to shed empirical light on the condition under which tacit collusion is most likely. We construct a database relating to 62 candidate mergers and find that, in the eyes of the Commission, tacit collusion in this context virtually never involves more than two firms and requires close symmetry in the market shares of the two firms.
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Bibliographic InfoPaper provided by Centre for Competition Policy, University of East Anglia in its series Working Papers with number 07-7.
Length: 38 pages
Date of creation: Mar 2007
Date of revision:
Tacit collusion; collective dominance; coordinated effects; European mergers; asymmetries;
Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-07-13 (All new papers)
- NEP-BEC-2007-07-13 (Business Economics)
- NEP-COM-2007-07-13 (Industrial Competition)
- NEP-EEC-2007-07-13 (European Economics)
- NEP-IND-2007-07-13 (Industrial Organization)
- NEP-MIC-2007-07-13 (Microeconomics)
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- Fonseca, Miguel A. & Normann, Hans-Theo, 2012.
"Explicit vs. tacit collusion: The impact of communication in oligopoly experiments,"
DICE Discussion Papers
65, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
- Fonseca, Miguel A. & Normann, Hans-Theo, 2012. "Explicit vs. tacit collusion—The impact of communication in oligopoly experiments," European Economic Review, Elsevier, vol. 56(8), pages 1759-1772.
- Catherine Roux & Christian Thöni, 2013. "Collusion Among Many Firms: The Disciplinary Power of Targeted Punishment," Cahiers de Recherches Economiques du DÃ©partement d'EconomÃ©trie et d'Economie politique (DEEP) 13.02, Université de Lausanne, Faculté des HEC, DEEP.
- Stephen Davies & Matthew Olczak, 2010. "Assessing the Efficacy of Structural Merger Remedies: Choosing Between Theories of Harm?," Review of Industrial Organization, Springer, vol. 37(2), pages 83-99, September.
- Aditya Bhattacharjea & Uday Bhanu Sinha, 2012. "Multi-market Collusion with Territorial Allocation," Working papers 217, Centre for Development Economics, Delhi School of Economics.
- Joseph E. Harrington, Jr., 2012. "Evaluating Mergers for Coordinated Effects and the Role of 'Parallel Accommodating Conduct'," Economics Working Paper Archive 601, The Johns Hopkins University,Department of Economics.
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