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On the Price Effects of Horizontal Mergers : A Theoretical Interpretation

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  • Emilie Dargaud

    ()
    (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France)

  • Carlo Reggiani

    ()
    (School of Social Sciences - Economics, University of Manchester, Manchester, M13 9PL, UK)

Abstract

Horizontal mergers are usually under the scrutiny of antitrust authorities due to their potential undesirable effects on prices and consumer surplus. Ex-post evidence, however, suggests that not always these effects take place and even relevant mergers may end up having negligible price effects. The analysis of mergers in the context of non-localized spatial competition may offer a further interpretation to the ones proposed in the literature : in this framework both positive and zero price effects are possible outcomes of the merger activity.

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Bibliographic Info

Paper provided by Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure in its series Working Papers with number 1222.

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Date of creation: 2012
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Handle: RePEc:gat:wpaper:1222

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Keywords: horizontal mergers; price effects; spokes model.;

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