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Bargaining over Remedies in Merger Regulation

Author

Listed:
  • Bruce Lyons

    (Centre for Competition Policy and School of Economics, University of East Anglia)

  • Andrei Medvedev

    (Centre for Competition, University of East Anglia)

Abstract

This paper provides a first attempt to understand how outcomes are determined by the standard institutions of merger control. In particular, we focus on the internationally standard 2-phase investigation structure and remedy negotiations of the form practiced by the EC. We find that there are inherent biases in remedy outcomes, and identifiable circumstances where offers will be excessive and where they will be deficient. In particular, we find clear circumstances in which firms offer excessive remedies, which goes against a possible intuition that firms should expect to extract an information rent for possessing superior information about competition in the market.

Suggested Citation

  • Bruce Lyons & Andrei Medvedev, 2007. "Bargaining over Remedies in Merger Regulation," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2007-03, Centre for Competition Policy, University of East Anglia, Norwich, UK..
  • Handle: RePEc:uea:ueaccp:2007_03
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    Citations

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    Cited by:

    1. Medvedev, A., 2004. "Structural Remedies in Merger Regulation in a Cournot Framework," Discussion Paper 2004-006, Tilburg University, Tilburg Law and Economic Center.
    2. Afonso Planas Raposo de Almeida Costa & Pedro Barros, 2012. "Does a Tougher Competition Policy Reduce or Promote Investment?," Journal of Industry, Competition and Trade, Springer, vol. 12(1), pages 119-141, March.
    3. Patrice Bougette, 2011. "Négociation d'engagements en matière de concentrations : une perspective d'économiste," Post-Print halshs-00580669, HAL.
    4. Cosnita, Andreea & Tropeano, Jean-Philippe, 2009. "Negotiating remedies: Revealing the merger efficiency gains," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 188-196, March.
    5. Peter L. Ormosi, 2009. "Determinants of the success of remedy offers: Evidence from European Community mergers," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2009-11, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    6. Pedro Barros & Joseph Clougherty & Jo Seldeslachts, 2010. "How to Measure the Deterrence Effects of Merger Policy: Frequency or Composition?," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 17(1), pages 1-8.
    7. Bougette, Patrice, 2010. "Preventing merger unilateral effects: A Nash-Cournot approach to asset divestitures," Research in Economics, Elsevier, vol. 64(3), pages 162-174, September.
    8. Chopard, Bertrand & Cortade, Thomas & Cosnita-Langlais, Andreea, 2015. "Success and failure of bargaining in merger control: The case of asset divestitures," Economic Modelling, Elsevier, vol. 49(C), pages 254-259.
    9. Luke Garrod & Bruce Lyons, 2011. "Early Settlement and Errors in Merger Control," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2011-05, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    10. Bertrand Chopard & Thomas Cortade & Andreea Cosnita-Langlais, 2008. "Settlement in Merger Cases: Remedies and Litigation," EconomiX Working Papers 2008-10, University of Paris Nanterre, EconomiX.

    More about this item

    Keywords

    Merger regulation; merger remedies; competition policy; bargaining;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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