Merger Simulation in Competition Policy: A Survey

39 Pages Posted: 2 Jun 2008  

Oliver Budzinski

Ilmenau University of Technology

Isabel Ruhmer

University of Mannheim - Center for Doctoral Studies in Economics and Management (CDSEM)

Multiple version iconThere are 2 versions of this paper

Date Written: May 29, 2008

Abstract

Advances in competition economics as well as in computational and empirical methods have offered the scope for the employment of merger simulation models in merger control procedures during the past almost 15 years. Merger simulation is, nevertheless, still a very young and innovative instrument of antitrust and, therefore, its "technical" potential is far from being comprehensively exploited and teething problems in its practical use in the antitrust environment prevail. We provide a classification of state-of-the-art merger simulation models and review their previous employment in merger cases as well as the problems and limitations currently associated with their use in merger control. In summary, merger simulation models represent an important and valuable extension of the toolbox of merger policy. However, they do not qualify as a magic bullet and must be combined with other, more traditional instruments of competition policy in order to comprehensively unfold its beneficial effects.

Keywords: merger simulation, merger control, antitrust, oligopoly theory, auction models, mergers & acquisitions

JEL Classification: L40, C15, K21

Suggested Citation

Budzinski, Oliver and Ruhmer, Isabel, Merger Simulation in Competition Policy: A Survey (May 29, 2008). Available at SSRN: https://ssrn.com/abstract=1138682 or http://dx.doi.org/10.2139/ssrn.1138682

Oliver Budzinski (Contact Author)

Ilmenau University of Technology ( email )

Ilmenau, D-98684
Germany

HOME PAGE: http://www.tu-ilmenau.de/wth

Isabel Ruhmer

University of Mannheim - Center for Doctoral Studies in Economics and Management (CDSEM) ( email )

Mannheim, D-68131
Germany

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