Unilateral Effects Under the Guidelines: Models, Merits, and Merger Policy

40 Pages Posted: 5 Sep 2008 Last revised: 12 May 2011

Date Written: May 10, 2011


This paper models Federal Trade Commission unilateral effects merger policy using a sample of 184 investigations undertaken between 1993 and 2010. A review of the files suggests that roughly half of the sample is evaluated with a dominant firm/monopoly model, while the rest of the cases require a more complex unilateral effects analysis. Statistical analysis shows the number of significant rivals represents the best structural proxy for the Federal Trade Commission’s policy choice, although other variables, such as fringe share, market leadership entry, effects’ evidence, and vertical issues also affect the outcome. Some of these variables suggest that the innovations in the 2010 Merger Guidelines were already applied in merger analysis. Material on deterministic models and case study review of merger investigations, discussed in a previous draft of this paper, is now available in Unilateral Effects Analysis and the Upward Pricing Pressure Model: Evidence from the Federal Trade Commission, 2011, Available at SSRN. http://ssrn.com/abstract=1837645

Keywords: Merger Guidelines, Federal Trade Commission, unilateral effects, evidence

JEL Classification: L40, K21

Suggested Citation

Coate, Malcolm B., Unilateral Effects Under the Guidelines: Models, Merits, and Merger Policy (May 10, 2011). Available at SSRN: https://ssrn.com/abstract=1263474 or http://dx.doi.org/10.2139/ssrn.1263474

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