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The balance of probabilities vs. the balance of harms in merger control

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  • Spiegel, Yossi

Abstract

I examine the difference between the balance of probabilities and the balance of harms standards in merger control. I show that both standards take into account the entire distribution of post-merger outcomes, but the former focuses on the median outcome whereas the latter focuses on the mean outcome. Consequently, a shift from a balance of probabilities to a balance of harms standard broadens the set of mergers that are blocked if the distribution of post-merger outcomes is skewed to the left and conversely if it is skewed to the right.

Suggested Citation

  • Spiegel, Yossi, 2025. "The balance of probabilities vs. the balance of harms in merger control," Economics Letters, Elsevier, vol. 247(C).
    • Handle: RePEc:eee:ecolet:v:247:y:2025:i:c:s0165176525000047
    DOI: 10.1016/j.econlet.2025.112167
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    References listed on IDEAS

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    1. Stephen W. Salant & Sheldon Switzer & Robert J. Reynolds, 1983. "Losses From Horizontal Merger: The Effects of an Exogenous Change in Industry Structure on Cournot-Nash Equilibrium," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(2), pages 185-199.
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    Keywords

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    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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