Unilateral Competitive Effects of Horizontal Mergers Ii: Auctions and Bargaining
Gregory J. Werden
U.S. Department of Justice - Antitrust Division
Vanderbilt University - Strategy and Business Economics
ABA Antitrust Section, Issues in Competition Law and Policy
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.
Number of Pages in PDF File: 15
Keywords: mergers, auctions, bargaining
JEL Classification: L41, L13
Date posted: January 15, 2007 ; Last revised: November 20, 2012
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