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Horizontal Mergers, Structural Remedies, and Consumer Welfare in a Cournot Oligopoly with Assets

19 Pages Posted: 30 Dec 2010  

Thibaud Verg

affiliation not provided to SSRN

Date Written: December 24, 2010

Abstract

Competition authorities sometimes require that firms divest some of their assets to rivals in order to allow a merger to take place. This paper extends the results of Farrell and Shapiro [1990a] and shows that, in the absence of technological synergies, a merger is highly unlikely to benefit consumers, even if it is subjected to appropriate structural remedies. For instance, a merger may ultimately lead to a lower price only if at least two different firms acquire the divested assets, and if the merging parties had relatively important pre-merger market shares.

JEL Classification: D43, K21, L13, L41

Suggested Citation

Verg, Thibaud, Horizontal Mergers, Structural Remedies, and Consumer Welfare in a Cournot Oligopoly with Assets (December 24, 2010). The Journal of Industrial Economics, Vol. 58, Issue 4, pp. 723-741, 2010. Available at SSRN: https://ssrn.com/abstract=1732391 or http://dx.doi.org/10.1111/j.1467-6451.2010.00432.x

Thibaud Verg (Contact Author)

affiliation not provided to SSRN

No Address Available

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