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The Welfare Effects of Vertical Mergers and their Remedies

Author

Listed:
  • John W. Mayo

    (Georgetown University)

  • Mark Whitener

    (Georgetown University)

Abstract

This paper extends Williamson’s (1968, 58(1):p. 18–36) classic framework of the welfare effect of mergers to the case of vertical mergers, and in particular to those in which the imposition of merger conditions (remedies) may allow an otherwise anticompetitive merger to proceed. While similarities to the case of horizontal mergers without a remedies option are present, differences also arise. Most notably: For prototypical vertical mergers, remedies may yield post–merger economic welfare that is higher than pre–merger levels. This suggests that remedies that are directed toward vertical mergers hold the promise of a more beneficial approach than in the case of horizontal mergers.

Suggested Citation

  • John W. Mayo & Mark Whitener, 2021. "The Welfare Effects of Vertical Mergers and their Remedies," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(2), pages 409-441, September.
    • Handle: RePEc:kap:revind:v:59:y:2021:i:2:d:10.1007_s11151-021-09829-8
    DOI: 10.1007/s11151-021-09829-8
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    References listed on IDEAS

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    Cited by:

    1. Roger D. Blair, 2021. "The 2020 Vertical Merger Guidelines," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 59(2), pages 133-138, September.

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