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Settlement in Merger Cases: Remedies and Litigation

Author

Listed:
  • Bertrand Chopard

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

  • Thomas Cortade
  • Andreea Cosnita-Langlais

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

Abstract

This paper performs a pre-trial settlement analysis for the negotiation of asset divestitures in merger control cases. Taking into account the asymmetric information between the competition agency and the merging firms concerning the true competition impact of the merger, we examine the impact on the likelihood of settlement divestiture and the divestiture amount in equilibrium of various factors, such as the transfer rate of the merger's cost savings, the severity of the appeal court, as well as the bargaining power of the merging partners in the sale of the divested assets.

Suggested Citation

  • Bertrand Chopard & Thomas Cortade & Andreea Cosnita-Langlais, 2008. "Settlement in Merger Cases: Remedies and Litigation," Working Papers hal-04140749, HAL.
    • Handle: RePEc:hal:wpaper:hal-04140749
    Note: View the original document on HAL open archive server: https://hal.science/hal-04140749
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    References listed on IDEAS

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    1. Malcolm B. Coate & Andrew N. Kleit, 2004. "Art of the Deal: The Merger Settlement Process at the Federal Trade Commission," Southern Economic Journal, John Wiley & Sons, vol. 70(4), pages 977-997, April.
    2. Farrell, Joseph, 2003. "Negotiation and Merger Remedies: Some Problems," Competition Policy Center, Working Paper Series qt9p72k8fn, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
    3. Bruce Lyons & Andrei Medvedev, 2007. "Bargaining over Remedies in Merger Regulation," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2007-03, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    4. Neven, Damien J. & Roller, Lars-Hendrik, 2005. "Consumer surplus vs. welfare standard in a political economy model of merger control," International Journal of Industrial Organization, Elsevier, vol. 23(9-10), pages 829-848, December.
    5. Joseph Farrell, 2003. "Negotiation and Merger Remedies: Some Problems," Chapters, in: François Lévêque & Howard Shelanski (ed.), Merger Remedies in American and European Union Competition Law, chapter 6, pages 95-105, Edward Elgar Publishing.
    6. Fridolfsson, Sven-Olof & Stennek, Johan, 2005. "Hold-up of anti-competitive mergers," International Journal of Industrial Organization, Elsevier, vol. 23(9-10), pages 753-775, December.
    7. Andreea Cosnita, 2006. "Merger, spin-off and divestiture: insights from a spatial model," Economics Bulletin, AccessEcon, vol. 4(9), pages 1-9.
    8. Malcolm B. Coate & Andrew N. Kleit, 2004. "Art of the Deal: The Merger Settlement Process at the Federal Trade Commission," Southern Economic Journal, John Wiley & Sons, vol. 70(4), pages 977-997, April.
    9. Lucian Arye Bebchuk, 1984. "Litigation and Settlement under Imperfect Information," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 404-415, Autumn.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Patrice Bougette, 2011. "Négociation d'engagements en matière de concentrations : une perspective d'économiste," Post-Print halshs-00580669, HAL.
    2. Peter L. Ormosi, 2009. "Determinants of the success of remedy offers: Evidence from European Community mergers," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2009-11, Centre for Competition Policy, University of East Anglia, Norwich, UK..

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    More about this item

    Keywords

    out-of-court settlement; merger control; divestitures; asymmetric information;
    All these keywords.

    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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