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A comment on efficiency gains and myopic antitrust authority in a dynamic merger game

Author

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  • Pedro Cosme da Costa Vieira

    (Faculdade de Economia, Universidade do Porto)

Abstract

This paper relaxes the Motta & Vasconcelos’ (2005) short-term assumption that firms’ capital is fixed. We demonstrate that, contrary to the conclusion of that article, in the best interest of consumers, even when firms have large economies of scale, long-term forward-looking Antitrust Authorities must block firms’ merger plans whenever profits of firms are positive.

Suggested Citation

  • Pedro Cosme da Costa Vieira, 2008. "A comment on efficiency gains and myopic antitrust authority in a dynamic merger game," FEP Working Papers 289, Universidade do Porto, Faculdade de Economia do Porto.
  • Handle: RePEc:por:fepwps:289
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    More about this item

    Keywords

    Antitrust policy; Economies of scale;

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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