Horizontal Mergers, Structural Remedies and Consumer Welfare in a Cournot Oligopoly with Assets
AbstractCompetition authorities sometimes require that firms divest some of their assets to rivalsin order to allow a merger to take place. This paper extends the results of Farrell andShapiro [1990a] and shows that, in the absence of technological synergies, a merger ishighly unlikely to benefit consumers, even if it is subjected to appropriate structuralremedies. For instance, a merger may ultimately lead to a lower price only if at leasttwo different firms acquire the divested assets, and if the merging parties had relativelyimportant pre-merger market shares.
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Bibliographic InfoPaper provided by Centre de Recherche en Economie et Statistique in its series Working Papers with number 2009-10.
Date of creation: 2009
Date of revision:
Other versions of this item:
- Thibaud Vergé, 2010. "Horizontal Mergers, Structural Remedies, And Consumer Welfare In A Cournot Oligopoly With Assets," Journal of Industrial Economics, Wiley Blackwell, vol. 58(4), pages 723-741, December.
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- Emilie Dargaud, 2013. "Horizontal mergers, efficiency gains and remedies," European Journal of Law and Economics, Springer, vol. 36(2), pages 349-372, October.
- Federico, Giulio & López, Ángel L., 2013. "Optimal asset divestments with homogeneous products," International Journal of Industrial Organization, Elsevier, vol. 31(1), pages 12-25.
- Dertwinkel-Kalt, Markus & Wey, Christian, 2012. "The effects of remedies on merger activity in oligopoly," DICE Discussion Papers 81, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
- Cosnita-Langlais, Andreea & Tropeano, Jean-Philippe, 2012. "Do remedies affect the efficiency defense? An optimal merger-control analysis," International Journal of Industrial Organization, Elsevier, vol. 30(1), pages 58-66.
- Wey, Christian & Dertwinkel-Kalt, Markus, 2013. "The Effects of Remedies on Merger Activity in Oligopoly," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79888, Verein für Socialpolitik / German Economic Association.
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