A comment on efficiency gains and myopic antitrust authority in a dynamic merger game
AbstractThis paper relaxes the Motta & Vasconcelos’ (2005) short-term assumption that firms’ capital is fixed. We demonstrate that, contrary to the conclusion of that article, in the best interest of consumers, even when firms have large economies of scale, long-term forward-looking Antitrust Authorities must block firms’ merger plans whenever profits of firms are positive.
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Bibliographic InfoPaper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 289.
Length: 5 pages
Date of creation: Sep 2008
Date of revision:
Antitrust policy; Economies of scale;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-09-20 (All new papers)
- NEP-BEC-2008-09-20 (Business Economics)
- NEP-COM-2008-09-20 (Industrial Competition)
- NEP-IND-2008-09-20 (Industrial Organization)
- NEP-MIC-2008-09-20 (Microeconomics)
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