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Merger Policy and Innovation: Must Enforcement Change to Account for Technological Change?

74 Pages Posted: 14 Sep 2004 Last revised: 1 Mar 2015

Michael L. Katz

University of California, Berkeley - Economic Analysis & Policy Group

Howard A. Shelanski

Georgetown University

Date Written: August 2004

Abstract

Merger policy is the most active area of U.S. antitrust policy. It is now widely believed that merger policy must move beyond its traditional focus on static efficiency to account for innovation and address dynamic efficiency. Innovation can fundamentally affect merger analysis in two ways. First, innovation can dramatically affect the relationship between the pre-merger marketplace and what is likely to happen if a proposed merger is consummated. Thus, innovation can fundamentally influence the appropriate analysis for addressing traditional, static efficiency concerns. Second, innovation can itself be an important dimension of market performance that is potentially affected by a merger. We explore how merger policy is meeting the challenges posed by innovation.

Suggested Citation

Katz, Michael L. and Shelanski, Howard A., Merger Policy and Innovation: Must Enforcement Change to Account for Technological Change? (August 2004). NBER Working Paper No. w10710. Available at SSRN: https://ssrn.com/abstract=583708

Michael Louis Katz (Contact Author)

University of California, Berkeley - Economic Analysis & Policy Group ( email )

Berkeley, CA 94720
United States

Howard A. Shelanski

Georgetown University ( email )

Washington, DC 20057
United States

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