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Unilateral Competitive Effects of Horizontal Mergers II: Auctions and Bargaining

Gregory J. Werden
U.S. Department of Justice - Antitrust Division

Luke Froeb
Vanderbilt University - Owen Graduate School of Management

ABA Antitrust Section, Issues in Competition Law and Policy

Abstract:
Horizontal mergers give rise to unilateral anticompetitive effects if they cause the merged firm to act less intensely competitive than the merging firms, while non-merging rivals do not alter their competitive strategies. This chapter describes the economic theory underlying unilateral competitive effects from mergers when prices are set through an auction or bargaining process. In the auction context, this chapter also describes the quantitative application of this theory in predicting the unilateral price effects of proposed mergers.

Keywords: mergers, auctions, bargaining

JEL Classifications: L41, L13

Accepted Paper Series

Date posted: January 15, 2007 ; Last revised: August 30, 2008

Suggested Citation

Werden, Gregory J. and Froeb, Luke M., Unilateral Competitive Effects of Horizontal Mergers II: Auctions and Bargaining. Available at SSRN: http://ssrn.com/abstract=956400

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Contact Information

Gregory J. Werden (Contact Author) U.S. Department of Justice - Antitrust Division ( email ) 600 E Street NW 10th Floor Washington, DC 20530 United States 202-307-6366 (Phone)
Luke M. Froeb Vanderbilt University - Owen Graduate School of Management ( email ) 401 21st Avenue South Nashville, TN 37203 United States 615-322-9057 (Phone) 615-343-7177 (Fax)