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Can foreclosure benefit consumers? The case of innovation in new markets

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  • Alexandre Carbonnel

    (NERA Economic Consulting)

Abstract

Innovation concerns have been at the core of some recent horizontal and non-horizontal mergers. This has led to a growing literature that has specifically focused on horizontal mergers. In this paper, I show that foreclosure may benefit consumers in non-horizontal mergers when firms compete to innovate in a new market. This is because it may allow consumers to benefit from an innovation to which they would not have access to in the absence of foreclosure. I determine the conditions leading to this conclusion and argue that a cautious approach to foreclosure by competition authorities is warranted when firms compete to innovate in a new

Suggested Citation

  • Alexandre Carbonnel, 2021. "Can foreclosure benefit consumers? The case of innovation in new markets," Economics Bulletin, AccessEcon, vol. 41(3), pages 1471-1480.
    • Handle: RePEc:ebl:ecbull:eb-21-00871
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I3-P126.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. Lefouili, Yassine & Madio, Leonardo, 2023. "Market Structure and Investments : A Progress Report," TSE Working Papers 23-1491, Toulouse School of Economics (TSE), revised Sep 2024.

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    More about this item

    Keywords

    Mergers; foreclosure; innovation;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • K2 - Law and Economics - - Regulation and Business Law

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