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Merger Simulation in Competition Policy: A Survey

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  • Oliver Budzinski

    ()
    (Department of Environmental and Business Economics, University of Southern Denmark)

  • Isabel Ruhmer

    ()
    (CDSE,University of Mannheim, Germany)

Abstract

Advances in competition economics as well as in computational and empirical methods have offered the scope for the employment of merger simulation models in merger control procedures during the past almost 15 years. Merger simulation is, nevertheless, still a very young and innovative instrument of antitrust and, therefore, its ‘technical’ potential is far from being comprehensively exploited and teething problems in its practical use in the antitrust environment prevail. We provide a classification of state-of-the-art merger simulation models and review their previous employment in merger cases as well as the problems and limitations currently associated with their use in merger control. In summary, merger simulation models represent an important and valuable extension of the toolbox of merger policy. However, they do not qualify as a magic bullet and must be combined with other, more traditional instruments of competition policy in order to comprehensively unfold its beneficial effects. The authors thank Ulrich Schwalbe, Wolfgang Kerber, Arndt Christiansen and Niels Vestergaard for valuable comments on earlier versions of the paper, the participants of the 30th Hohenheimer Oberseminar (Nuernberg, April 2008) for helpful discussion, and Barbara Güldenring for valuable editorial assistance.

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Bibliographic Info

Paper provided by University of Southern Denmark, Department of Environmental and Business Economics in its series Working Papers with number 82/09.

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Length: 76 pages
Date of creation: Jan 2009
Date of revision:
Handle: RePEc:sdk:wpaper:82

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Keywords: Merger simulation; merger control; antitrust; oligopoly theory; auction models; mergers & acquisitions;

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