Efficiency Gains and Myopic Antitrust Authority in a Dynamic Merger Game

31 Pages Posted: 20 Jan 2004

See all articles by Massimo Motta

Massimo Motta

Universitat Pompeu Fabra

Helder Vasconcelos

Universidade do Porto - Faculdade de Economia (FEP)

Date Written: January 2004

Abstract

This Paper models a sequential merger formation game with endogenous efficiency gains in which every merger has to be submitted for approval to the Antitrust Authority (AA). Two different types of AA are studied: first, a myopic AA, which judges a given merger without considering that subsequent mergers may occur; and, second, a forward-looking AA, which anticipates the ultimate market structure a given merger will lead to. By contrasting the decisions of these two types of AA, merger policy implications can be drawn. In particular, the efficiency offence argument does not find any justification under a forward-looking AA.

Keywords: Endogenous mergers, foresight, efficiency offence

JEL Classification: D43, L13, L41

Suggested Citation

Motta, Massimo and Vasconcelos, Helder, Efficiency Gains and Myopic Antitrust Authority in a Dynamic Merger Game (January 2004). CEPR Discussion Paper No. 4175. Available at SSRN: https://ssrn.com/abstract=490583

Massimo Motta (Contact Author)

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

Helder Vasconcelos

Universidade do Porto - Faculdade de Economia (FEP) ( email )

Rua Dr. Roberto Frias
s/n
4200-464 Porto, 4200-464
Portugal

HOME PAGE: http://www.fep.up.pt/docentes/hvasconcelos

Register to save articles to
your library

Register

Paper statistics

Downloads
22
Abstract Views
1,075
PlumX Metrics