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Make or Buy Decisions and Data Sharing

Author

Listed:
  • Antoine Dubus
  • Patrick Legros

Abstract

Firms may share data to discover potential synergies between their data sets and algorithms,eventually leading to more efficient mergers and acquisitions (M&A) decisions. However,data sharing also modifies the competitive balance when firms do not merge, and a companymay be reluctant to share data with potential rivals. Under general conditions, we show thatfirms benefit from (partially) sharing data. By doing so, they can merge conditionally basedon high synergies. Compared to a laissez-faire situation, the presence of a regulator allowingor refusing the M&A may increase or decrease data sharing, with a concomitant increaseor decrease in consumer surplus. Hence, regulation can lower the surplus of consumers it iswilling to protect. We revisit the Google/Fitbit acquisition through the lens of this interplaybetween strategic data sharing and antitrust policy.

Suggested Citation

  • Antoine Dubus & Patrick Legros, 2026. "Make or Buy Decisions and Data Sharing," Working Papers ECARES 2026-05, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:eca:wpaper:2013/403154
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    References listed on IDEAS

    as
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    More about this item

    Keywords

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    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • 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
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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