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Success and Failure of Bargaining in Merger Control: The Case of Asset Divestitures

Author

Listed:
  • Bertrand Chopard

    () (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Thomas Cortade

    ()

  • Andreea Cosnita-Langlais

    () (EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper studies the bargaining over merger asset divestiture in the shadow of appeal litigation. We provide theoretical foundations for a recurrent empirical finding, namely that the opportunity cost born by the merging firms due to merger control has direct consequences for the remedy divestiture agreement. Increased severity of the appeal court improves the imperfect merger screening implemented by the agency through remedy negotiation, which possibly argues in favor of a judicial complement to the “regulatory” merger policy enforcement. But the main recommendation for agencies is to devise tools to better deal with the asymmetric information that limits the effectiveness of their merger policy enforcement.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Bertrand Chopard & Thomas Cortade & Andreea Cosnita-Langlais, 2015. "Success and Failure of Bargaining in Merger Control: The Case of Asset Divestitures," Post-Print hal-01385984, HAL.
  • Handle: RePEc:hal:journl:hal-01385984
    Note: View the original document on HAL open archive server: https://hal-univ-paris10.archives-ouvertes.fr/hal-01385984
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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