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Optimal Merger Remedies

Author

Listed:
  • Volker Nocke

    (University of Mannheim = Universität Mannheim, CEPR - Center for Economic Policy Research)

  • Andrew Rhodes

    (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPR - Center for Economic Policy Research)

Abstract

We develop a framework to study horizontal mergers when the parties can propose remedies to an antitrust authority. Remedies are modeled as asset divestitures, which make the firm receiving the assets more efficient at the expense of the merged firm. We consider both the case where the merger affects a single market and where it affects multiple markets. Solving for the merging firms' optimal proposal, we investigate when it involves remedies—and if so, which assets should be divested, and to whom, and how this depends on market characteristics such as the level of competitiveness.

Suggested Citation

  • Volker Nocke & Andrew Rhodes, 2025. "Optimal Merger Remedies," Working Papers hal-05261404, HAL.
    • Handle: RePEc:hal:wpaper:hal-05261404
    Note: View the original document on HAL open archive server: https://hal.science/hal-05261404v1
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    Cited by:

    1. is not listed on IDEAS
    2. Bougette, Patrice & Budzinski, Oliver & Marty, Frédéric, 2025. "Revisiting behavioral merger remedies in turbulent markets: A framework for dynamic competition," Ilmenau Economics Discussion Papers 202, Ilmenau University of Technology, Institute of Economics.

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    Keywords

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    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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