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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- 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.
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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).
- 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.
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