Structural remedies in merger regulation in a Cournot framework
To prevent possible abuse of market power in the future an antitrust agency can force merging firms to divest some of their assets. The divested assets can be sold via auction either to existing competitors or to a new entrant. Divesture of assets extends the range of parameters when a merger satisfies a consumer surplus standard and should be approved. If the agency takes a more active stance toward the selection of a purchase of the assets, then it could lead to a favorable outcome for consumers and merging firms.
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Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP)
00.24, Université de Lausanne, Faculté des HEC, DEEP.
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- Damien J. Neven & Lars-Hendrik Röller, 2000. "Consumer Surplus vs. Welfare Standard in a Political Economy Model of Merger Control," CIG Working Papers FS IV 00-15, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
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