The Deterrence Effects of U.S. Merger Policy Instruments
AbstractWe estimate the deterrence effects of U.S. merger policy instruments with respect tothe composition and frequency of future merger notifications. Data from the Annual Reports bythe U.S. DOJ and FTC allow industry based measures over the 1986-1999 period of theconditional probabilities for eliciting investigations, challenges, prohibitions, court-wins andcourt-losses: deterrence variables akin to the traditional conditional probabilities from theeconomics of crime literature. We find the challenge-rate to robustly deter future horizontal(both relative and absolute) merger activity; the investigation-rate to slightly deter relativehorizontalmerger activity; the court-loss-rate to moderately affect absolute-horizontal mergeractivity; and the prohibition-rate and court-win-rate to not significantly deter future horizontalmergers. Accordingly, the conditional probability of eliciting an antitrust challenge (i.e.,remedies and prohibitions) involves the strongest deterrence effect from amongst the differentmerger policy instruments.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 11-095/1.
Date of creation: 15 Jul 2011
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antitrust; deterrence; merger policy;
Other versions of this item:
- Joseph A. Clougherty & Jo Seldeslachts, 2013. "The Deterrence Effects of US Merger Policy Instruments," Journal of Law, Economics and Organization, Oxford University Press, vol. 29(5), pages 1114-1144, October.
- Clougherty, Joseph A. & Seldeslachts, Jo, 2011. "The Deterrence Effects of U.S. Merger Policy Instruments," CEPR Discussion Papers 8482, C.E.P.R. Discussion Papers.
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
- L49 - Industrial Organization - - Antitrust Issues and Policies - - - Other
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
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