Monopoly in the UK: What Determines whether the MMC finds against the Investigated Firms?
AbstractThis paper draws on data from 73 UK Monopolies and Mergers Commission reports on monopoly between 1973 and 1995. It shows that there is a roughly two in three chance that the Commission will come to an adverse conclusion against the investigated firms in a given case. although the underlying philosophy of UK policy in this area has always been based on a case-by-case approach (in which precedent plays little part), the model demonstrates that a significant majority of MMC decisions are predictable using a very simple probit model, based on standard, readily observable characteristics. Specifically, 75-80% of decisions can be explained purely in terms of the market share of the leading firm (but not those f the second and third ranked firms), and knowledge of the broad nature of the alleged anti-competitive practice. An adverse finding is most likely in cases involving exclusive dealing, and least likely where other vertical restraints are involved.
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Bibliographic InfoPaper provided by School of Economics, University of East Anglia, Norwich, UK. in its series University of East Anglia Discussion Papers in Economics with number 9808.
Length: 25 pages
Date of creation: 1998
Date of revision:
Postal: Helen Chapman, School of Economics, University of East Anglia, Norwich Research Park, Norwich, NR4 7TJ, UK
Other versions of this item:
- Davies, Stephen W & Driffield, Nigel L & Clarke, Roger, 1999. "Monopoly in the UK: What Determines Whether the MMC Finds against the Investigated Firms?," Journal of Industrial Economics, Wiley Blackwell, vol. 47(3), pages 263-83, September.
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
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