References (14)


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Dynamic Merger Review

Volker Nocke

University of Mannheim - Department of Economics

Michael D. Whinston

Northwestern University - Department of Economics; National Bureau of Economic Research (NBER)

December 2008

CEPR Discussion Paper No. DP7077

We analyze the optimal dynamic policy of an antitrust authority towards horizontal mergers when merger proposals are endogenous and occur over time. Approving a currently proposed merger will affect the profitability and welfare effects of potential future mergers, the characteristics of which may not yet be known to the antitrust authority. We show that, in many cases, this apparently difficult problem has a simple resolution: an antitrust authority can maximize discounted consumer surplus by using a completely myopic merger review policy that approves a merger today if and only if it does not lower consumer surplus given the current market structure.

Number of Pages in PDF File: 53

Keywords: efficiency gain, horizontal merger, market power, merger policy, oligopoly

JEL Classification: D43, L13, L41

Date posted: February 17, 2009  

Suggested Citation

Nocke, Volker and Whinston, Michael D., Dynamic Merger Review (December 2008). CEPR Discussion Paper No. DP7077. Available at SSRN: http://ssrn.com/abstract=1344636

Contact Information

Volker Nocke
University of Mannheim - Department of Economics ( email )
D-68131 Mannheim
HOME PAGE: http://nocke.vwl.uni-mannheim.de
Michael D. Whinston (Contact Author)
Northwestern University - Department of Economics ( email )
2003 Sheridan Road
Evanston, IL 60208
United States
312-491-8260 (Phone)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Feedback to SSRN

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References:  14
Citations:  3

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