Mergers, Litigation and Efficiency
AbstractWe consider antitrust enforcement within the adversarial model used by the United States. We show that, under the adversarial system, the Antitrust Authority may try to prohibit mergers also in those cases in which litigation is inefficient. Even if market concentration and technological disadvantages lead to a significant welfare reduction after merger, from societyâ€™s perspective the agencyâ€™s lawsuit may be inefficient. We can show that these inefficiencies may be aggravated if the takeover is hostile.
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Bibliographic InfoPaper provided by Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich in its series Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems with number 185.
Date of creation: Dec 2006
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hostile takeover; litigation contest; merger;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-14 (All new papers)
- NEP-BEC-2007-01-14 (Business Economics)
- NEP-COM-2007-01-14 (Industrial Competition)
- NEP-IND-2007-01-14 (Industrial Organization)
- NEP-LAW-2007-01-14 (Law & Economics)
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