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Merger control in retail markets with national pricing

Author

Listed:
  • Tommy Staahl Gabrielsen

    (Department of Economics, University of Bergen)

  • Bjørn Olav Johansen

    (Department of Economics, University of Bergen)

  • Odd Rune Straume

    (NIPE/Center for Research in Economics and Management, University of Minho, Portugal; and Department of Economics, University of Bergen, Norway)

Abstract

We analyze theoretically the efficiency of structural remedies in merger control in retail markets and show that this crucially depends on the retail chains´pricing policy. Whereas a retail merger can be perfectly remedied by divestiture of stores under local pricing, such remedies are not only less effective, but might even be counterproductive, if the chains set national prices. Paradoxically, such remedies might be even more counterproductive if the chains also compete locally along non-price dimensions such as quality. Our analysis suggests that antitrust authorities should be very cautious when reviewing structural remedies in retail markets with national pricing.

Suggested Citation

  • Tommy Staahl Gabrielsen & Bjørn Olav Johansen & Odd Rune Straume, 2022. "Merger control in retail markets with national pricing," NIPE Working Papers 10/2022, NIPE - Universidade do Minho.
    • Handle: RePEc:nip:nipewp:10/2022
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    File URL: http://repositorium.sdum.uminho.pt/handle/1822/80607
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    More about this item

    Keywords

    Retail mergers; structural remedies; national pricing.;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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