Merger Simulation in an Administrative Context

22 Pages Posted: 21 Mar 2011 Last revised: 30 Apr 2013

Jonathan B. Baker

American University - Washington College of Law

Date Written: February 22, 2011

Abstract

This article addresses the application of the economic literature on merger simulation to the practical context of antitrust enforcement. It highlights the value of simple simulations as a basis for creating screens and presumptions – particularly the gross upward pricing pressure index for the preliminary review of unilateral effects among sellers of branded consumer products and a presumption based on identifying mavericks for the analysis of coordinated effects – in order to provide guidance to merging firms and judges, who may not have specialized competition policy expertise. The article explains why antitrust agencies should rely on these approaches to identify mergers for in-depth review, and why courts should be encouraged to accept them as the basis for presumptions of anticompetitive effect. The proposed role for simple simulations is consistent with the direction in which the U.S. horizontal merger guidelines are evolving.

Keywords: merger simulation, antitrust review of mergers

JEL Classification: K21, L40

Suggested Citation

Baker, Jonathan B., Merger Simulation in an Administrative Context (February 22, 2011). Antitrust Law Journal , Vol. 77, 2011. Available at SSRN: https://ssrn.com/abstract=1790943 or http://dx.doi.org/10.2139/ssrn.1790943

Jonathan B. Baker (Contact Author)

American University - Washington College of Law ( email )

4300 Nebraska Avenue, NW
Washington, DC 20016
United States
202-274-4315 (Phone)

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