Merger Efficiencies and Competition Policy
AbstractSince the United States changed its guidelines in 1984, many industrialized nations have included efficiencies defenses in their rules for judging whether mergers and other activities that might lessen competition are on balance desirable. This paper was written for an OECD competition policy conference in Paris October 25, 2012. It presents the standard Williamson "tradeoff" analysis and explores why consumer price benefits might be required in the current economic environment, with its substantial unemployment and Keynesian liquidity traps that limit the reinvestment of efficiency-based profits in additional output. It also explores the difficulty of assessing efficiency benefits in advance of mergers and suggests alternative approaches to the problem.
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Bibliographic InfoPaper provided by Harvard University, John F. Kennedy School of Government in its series Working Paper Series with number rwp12-048.
Date of creation: Oct 2012
Date of revision:
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Web page: http://www.ksg.harvard.edu/research/working_papers/index.htm
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-17 (All new papers)
- NEP-COM-2012-11-17 (Industrial Competition)
- NEP-HME-2012-11-17 (Heterodox Microeconomics)
- NEP-IND-2012-11-17 (Industrial Organization)
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