The Farrell and Shapiro condition revisited
AbstractThe purpose of this paper is to study the consequences of using the Farrell and Shapiro (1990) sufficient condition for merger approval to sectors in which a downstream horizontal merger may also affect upstream firms. As will be shown below, in some circumstances the sign of the relevant external effect can no longer be established by considering the merger as a sequence of in finitesimal mergers, each corresponding to a marginal change in output.
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Bibliographic InfoPaper provided by Universidade Nova de Lisboa, IET/CESNOVA-Research on Enterprise and Work Innovation, Faculty of Science and Technology in its series IET Working Papers Series with number 01/2007.
Length: 15 pages
Date of creation: Dec 2007
Date of revision:
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- Farrell, Joseph & Shapiro, Carl, 1988.
"Horizontal Mergers: An Equilibrium Analysis,"
Department of Economics, Working Paper Series, Department of Economics, Institute for Business and Economic Research, UC Berkeley
qt0tp305nx, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
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- Joseph Farrell and Carl Shapiro., 1988. "Horizontal Mergers: An Equilibrium Analysis," Economics Working Papers, University of California at Berkeley 8880, University of California at Berkeley.
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- Dobson, Paul W & Waterson, Michael, 1997. "Countervailing Power and Consumer Prices," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 107(441), pages 418-30, March.
- Pita Barros, Pedro Luis, 1997. "Approval Rules for Sequential Horizontal Mergers," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1764, C.E.P.R. Discussion Papers.
- Barros, Pedro P. & Cabral, Luis, 1994. "Merger policy in open economies," European Economic Review, Elsevier, Elsevier, vol. 38(5), pages 1041-1055, May.
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