Capacity constraints and irreversible investments: defending against collective dominance in UPM Kymmene/Norske Skog/Haindl
AbstractScrutiny of potential mergers by the European Commission often focuses on unilateral effects or single firm dominance. But some cases have involved concerns over coordinated effects: the concern that the merger could increase the likelihood of consumer harm through tacit collusion by the reduced number of firms in the industry (this is known as collective dominance). The economic and legal issues are far less certain in these cases and a particular challenge is how to bring empirical evidence to bear on the decision. In this chapter we examine a case in newsprint and magazine paper - UPM Kymmene/Norske Skog/Haindl . Here, coordinated effects were at the centre of the Commission’s concerns. We discuss how collusion theory and evidence were used to help clear the merger without remedies in the final Decision.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by London School of Economics and Political Science in its series Open Access publications from London School of Economics and Political Science with number CEPSP19.
Date of creation: Feb 2008
Date of revision:
Contact details of provider:
Web page: http://www.lse.ac.uk
Other versions of this item:
- Kai Uwe Kühn & John Van Reenen, 2008. "Capacity Constraints and Irreversible Investments: Defending Against Collective Dominance in UPM Kymmene/Norske Skog/Haindl," CEP Special Papers 19, Centre for Economic Performance, LSE.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Beth Allen & Raymond Deneckere & Tom Faith & Dan Kovenock, 1995.
"Capacity precommitment as a barrier to entry: a Bertrand-Edgeworth approach,"
187, Federal Reserve Bank of Minneapolis.
- Dan Kovenock & Raymond Deneckere & Tom Faith & Beth Allen, 2000. "Capacity precommitment as a barrier to entry: A Bertrand-Edgeworth approach," Economic Theory, Springer, vol. 15(3), pages 501-530.
- Allen, B. & Deneckere, R. & Faith, T. & Kovenock, D., 1994. "Capacity Precommitment as a Barrier to Entry: A Bertrand-Edgeworth Approach," Purdue University Economics Working Papers 1062, Purdue University, Department of Economics.
- Beth Allen & Raymond Deneckere & Tom Faith & Dan Kovenock, 1994. "Capacity Precommitment as a Barrier to Entry:A Bertrand-Edgeworth Approach," Industrial Organization 9411002, EconWPA, revised 14 Nov 1994.
- Allen, B. & Deneckere, R. & Faith, T. & Kovenock, D., 1994. "Capacity Precommitment as a Barrier to Entry: A Bertrand- Engeworth Approach," Papers 9483, Tilburg - Center for Economic Research.
- Bloom, Nicholas & Bond, Stephen Roy & Van Reenen, John, 2003. "Uncertainty and Company Investment Dynamics: Empirical Evidence for UK Firms," CEPR Discussion Papers 4025, C.E.P.R. Discussion Papers.
- Compte, Olivier & Jenny, Frederic & Rey, Patrick, 2002.
"Capacity constraints, mergers and collusion,"
European Economic Review,
Elsevier, vol. 46(1), pages 1-29, January.
- Compte, Olivier & Jenny, François & Rey, Patrick, 2002. "Capacity Constraints, Mergers and Collusion," Open Access publications from University of Toulouse 1 Capitole http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole.
- Dixit, Avinash, 1991. "Analytical Approximations in Models of Hysteresis," Review of Economic Studies, Wiley Blackwell, vol. 58(1), pages 141-51, January.
- Davidson, Carl & Deneckere, Raymond J, 1990.
"Excess Capacity and Collusion,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(3), pages 521-41, August.
- Osborne, Martin J. & Pitchik, Carolyn, 1983.
"Cartels, Profits, and Excess Capacity,"
83-09, C.V. Starr Center for Applied Economics, New York University.
- Christensen, Laurits Rolf & Caves, Richard E, 1997. "Cheap Talk and Investment Rivalry in the Pulp and Paper Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 45(1), pages 47-73, March.
- Ricardo J. Caballero & Eduardo M. R. A. Engel & John C. Haltiwanger, 1995. "Plant-Level Adjustment and Aggregate Investment Dynamics," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(2), pages 1-54.
- Maura P. Doyle & Christopher M. Snyder, 1999.
"Information Sharing and Competition in the Motor Vehicle Industry,"
Journal of Political Economy,
University of Chicago Press, vol. 107(6), pages 1326-1364, December.
- Maura P. Doyle & Christopher M. Snyder, 1997. "Information sharing and competition in the motor vehicle industry," Finance and Economics Discussion Series 1997-4, Board of Governors of the Federal Reserve System (U.S.).
- Steen, Frode & Sorgard, Lars, 1999.
"Semicollusion in the Norwegian cement market,"
European Economic Review,
Elsevier, vol. 43(9), pages 1775-1796, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (LSE Research Online).
If references are entirely missing, you can add them using this form.