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On the Effective Design of the Efficiency Defence

  • Andreea Cosnita

    ()

    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

  • Jean-Philippe Tropeano

    ()

    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

The efficiency defence was long delayed in the European merger control due to costly implementation issues. In this paper we argue that the upstream consequences of the efficiency defence should equally be considered, namely the improvement of the distribution of notified mergers through the incentives it provides towards more efficient mergers. First of all, we show that even if the Competition Authority may not tell apart the mergers that rightfully invoke the efficiency defence from those that do not, allowing such a procedure can lead to a lower post-merger price. Secondly, we study the impact of merger remedies on the incentives conveyed by the efficiency defence, and conclude on the optimal design of the efficiency defence procedure.

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Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00113503.

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Date of creation: Apr 2006
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Handle: RePEc:hal:cesptp:halshs-00113503
Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00113503
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  1. Gary S. Becker, 1968. "Crime and Punishment: An Economic Approach," Journal of Political Economy, University of Chicago Press, vol. 76, pages 169.
  2. Jo Seldeslachts & Joseph A. Clougherty & Pedro Pita Barros, 2009. "Settle for Now but Block for Tomorrow: The Deterrence Effects of Merger Policy Tools," Journal of Law and Economics, University of Chicago Press, vol. 52(3), pages 607-634, 08.
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  4. Jo Seldeslachts & Joseph A. Clougherty & Pedro Pita Barros, 2007. "Remedy for Now but Prohibit for Tomorrow: The Deterrence Effects of Merger Policy Tools," CIG Working Papers SP II 2007-02, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
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  6. Albert Banal-Estañol & Jo Seldeslachts, 2005. "Merger Failures," CIG Working Papers SP II 2005-09, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  7. Loss, Frederic & Malavolti-Grimal, Estelle & Verge, Thibaud & Berges-Sennou, Fabian, 2008. "European competition policy modernization: From notifications to legal exception," European Economic Review, Elsevier, vol. 52(1), pages 77-98, January.
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  10. 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.
  11. Caillaud, Bernard & Duchêne, Anne, 2011. "Patent office in innovation policy: Nobody's perfect," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 242-252, March.
  12. Ecer, Sencer, 2005. "A rational expectations critique of merger policy analysis," Economics Letters, Elsevier, vol. 86(1), pages 73-77, January.
  13. Armstrong, Mark & Vickers, John, 2008. "A model of delegated project choice," MPRA Paper 8963, University Library of Munich, Germany.
  14. Yosha Oved, 1995. "Information Disclosure Costs and the Choice of Financing Source," Journal of Financial Intermediation, Elsevier, vol. 4(1), pages 3-20, January.
  15. Lars-Hendrik Röller & Johan Stennek & Frank Verboven, 2000. "Efficiency Gains from Mergers," CIG Working Papers FS IV 00-09, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
  16. Banal-Estanol, Albert & Macho-Stadler, Ines & Seldeslachts, Jo, 2008. "Endogenous mergers and endogenous efficiency gains: The efficiency defence revisited," International Journal of Industrial Organization, Elsevier, vol. 26(1), pages 69-91, January.
  17. Jorde, Thomas M & Teece, David J, 1990. "Innovation and Cooperation: Implications for Competition and Antitrust," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 75-96, Summer.
  18. Heidhues, Paul & Lagerlöf, Johan N. M., 2003. "On the Desirability of an Efficiency Defense in Merger Control," CEPR Discussion Papers 3841, C.E.P.R. Discussion Papers.
  19. Fabienne Ilzkovitz & Roderick Meiklejohn, 2003. "European Merger Control: Do We Need an Efficiency Defence?," Journal of Industry, Competition and Trade, Springer, vol. 3(1), pages 57-85, March.
  20. repec:cup:cbooks:9780521816632 is not listed on IDEAS
  21. repec:cup:cbooks:9780521016919 is not listed on IDEAS
  22. Shapiro, Carl & Willig, Robert D, 1990. "On the Antitrust Treatment of Production Joint Ventures," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 113-30, Summer.
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