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The Sale of Data :Learning Synergies Before M&As

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  • Antoine Dubus
  • Patrick Legros

Abstract

Firms may share information to discover potential synergies between their data sets and algorithms, which eventually may lead to more efficient mergers and acquisitions (M&A) decisions. However, as pointed out by Arrow, information sharing also modifies the competitive balance when companies do not merge, and a firm may be reluctant to share information with potential rivals. Under general conditions, we show that firms benefit from (partially) sharing information. Because more sharing of information may increase industry expected profits both when there is head-to-head competition and when there is an M&A, the presence of a regulator who can prevent or allow the M&A can decrease or increase the level of information sharing, as well as consumer surplus, with respect to the no-regulator case. A regulator who can also control the level of information sharing will allow firms to share information.

Suggested Citation

  • Antoine Dubus & Patrick Legros, 2022. "The Sale of Data :Learning Synergies Before M&As," Working Papers ECARES 2022-20, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:eca:wpaper:2013/344835
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    References listed on IDEAS

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    Cited by:

    1. Tzvetomir Tzanov, 2024. "Super Apps and Synergies Generation – Strategic and Financial Management Implications," Innovative Information Technologies for Economy Digitalization (IITED), University of National and World Economy, Sofia, Bulgaria, issue 1, pages 51-60, October.
    2. Hemant Bhargava & Antoine Dubus & David Ronayne & Shiva Shekhar, 2024. "The Strategic Value of Data Sharing in Interdependent Markets," CESifo Working Paper Series 10963, CESifo.

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    More about this item

    Keywords

    synergies; mergers; sale of data; incomplete information; antitrust; privacy;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • L5 - Industrial Organization - - Regulation and Industrial Policy

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