An Equilibrium Approach to International Merger Policy

13 Pages Posted: 31 Oct 2008

See all articles by Luis M. B. Cabral

Luis M. B. Cabral

University of Navarra, IESE Business School; New York University (NYU)

Date Written: September 2005

Abstract

treat international merger policy as a repeated veto game. I show that there exists a unique efficient equilibrium within a particular class of trigger strategy equilibria. I then consider a series of comparative statics and extensions: (a) if for some exogenous reason one of the countries becomes more lenient towardsmergers, than the other country becomes more lenient as well; (b) merger remedies increase the probability that a merger is approved and increase total welfare; (c) the effects of a merger wave are magnified by the equilibrium approval policy.

Keywords: Merger policy, Repeated games

Suggested Citation

B. Cabral, Luis M., An Equilibrium Approach to International Merger Policy (September 2005). NYU Working Paper No. EC-03-25, Available at SSRN: https://ssrn.com/abstract=1292645

Luis M. B. Cabral (Contact Author)

University of Navarra, IESE Business School

Avenida Pearson 21
Barcelona, 08034
Spain

New York University (NYU)

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United States

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