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Merger Simulation In Competition Policy: A Survey

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  • Oliver Budzinski
  • Isabel Ruhmer

Abstract

Advances in competition economics as well as in computational and empirical methods have offered the scope for the employment of merger simulation models (MSMs) in merger-control procedures during the past almost 15 years. Merger simulation is, nevertheless, still a very young and innovative instrument of antitrust, and, therefore, its “technical” potential is far from being comprehensively exploited, and teething problems in its practical use in the antitrust environment prevail. We provide a classification of state-of-the-art MSMs and review their previous employment in merger cases as well as the problems and limitations currently associated with their use in merger control. In summary, MSMs represent an important and valuable extension of the toolbox of merger policy. However, they do not qualify as a magic bullet and must be combined with other more traditional instruments of competition policy to comprehensively unfold its beneficial effects.

Suggested Citation

  • Oliver Budzinski & Isabel Ruhmer, 2010. "Merger Simulation In Competition Policy: A Survey," Journal of Competition Law and Economics, Oxford University Press, vol. 6(2), pages 277-319.
  • Handle: RePEc:oup:jcomle:v:6:y:2010:i:2:p:277-319.
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    JEL classification:

    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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