Antitrust Enforcement and the Design of Disclosure Rules. An Application to Merger Control
This article investigates how antitrust agencies should structure the disclosing of information about efficiency gains from interested parties (merging firms, and competitors) in merger control. We analyze the particular case of a horizontal merger with danger of foreclosure, where welfare can decrease either due to insufficient efficiency gains (efficiency defense) or due to excessive efficiency gains if the competitor exits (effi- ciency offense). The first result is that evidence from competitors is not required unless the ex-ante market shares of the merging firms exceed a threshold. Second, we support the role of advocacy of the parties. The burden of proof for efficiency defense should rest in the insiders (merg- ing firms) whereas the burden of proof for efficiency offense should rest in outsiders (competitors). Finally, it is optimal to make insiders report first and outsiders second and any communication among parties has to be prohibited
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- Tomaso Duso & Damien J. Neven & Lars-Hendrik RÃ¶ller, 2007.
"The Political Economy of European Merger Control: Evidence using Stock Market Data,"
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- Duso, Tomaso & Neven, Damien J & Röller, Lars-Hendrik, 2003. "The Political Economy of European Merger Control: Evidence Using Stock Market Data," CEPR Discussion Papers 3880, C.E.P.R. Discussion Papers.
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"Horizontal Mergers: An Equilibrium Analysis,"
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- Joseph Farrell and Carl Shapiro., 1988. "Horizontal Mergers: An Equilibrium Analysis," Economics Working Papers 8880, University of California at Berkeley.
- Farrell, Joseph & Shapiro, Carl, 1988. "Horizontal Mergers: An Equilibrium Analysis," Department of Economics, Working Paper Series qt0tp305nx, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Paul R. Milgrom & John Roberts, 1985.
"Relying on the Information of Interested Parties,"
Cowles Foundation Discussion Papers
749, Cowles Foundation for Research in Economics, Yale University.
- Fudenberg, Drew & Tirole, Jean, 1984. "The Fat-Cat Effect, the Puppy-Dog Ploy, and the Lean and Hungry Look," American Economic Review, American Economic Association, vol. 74(2), pages 361-366, May.
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