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Efficiency Gains from Mergers

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Author Info
Röller, Lars-Hendrik (Wissenschaftszentrum Berlin (WZB) and CEPR)
Stennek, Johan () (The Research Institute of Industrial Economics)
Verboven, Frank (Universiteit Antwerpen (UFSIA) and CEPR)

Additional information is available for the following registered author(s):

Abstract

The purpose of this report is to contribute to the analysis of two questions. Should a merger control system take into account efficiency gains from horizontal mergers, and balance these gains against the anti-competitive effects of mergers? If so, how should a system be designed to account for efficiency gains? The report is based on a report to the European Commission.

To help answer the two questions we start with an extensive review of the relevant economic research, including both theoretical and empirical studies of mergers and merger control. Next, we review the current legal practice in seven OECD jurisdictions. Finally, we propose a merger control system, emphasising the central role of informational limitations.

Based on our conclusions from the empirical literature that efficiencies may need to be assessed on a case-by-case basis, we construct an information-economising two-stage decision framework for evaluating mergers. In a first stage, notified mergers are assessed using routine tools with modest information requirements. Mergers that do not pass the first stage test are subject to further investigation, including an efficiency defence.

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Publisher Info
Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 543.

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Length: 134 pages
Date of creation: 21 Dec 2000
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Handle: RePEc:hhs:iuiwop:0543

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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
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Related research
Keywords: Mergers & Acquisitions Efficiency Defence

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Find related papers by JEL classification:
K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
L40 - Industrial Organization - - Antitrust Issues and Policies - - - General

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