Unilateral Competitive Effects of Horizontal Mergers

Werden, Gregory J.; Froeb, Luke M.

Unilateral Competitive Effects of Horizontal Mergers

Handbook of Antitrust Economics, 2006

95 Pages Posted: 22 Oct 2006

See all articles by Gregory J. Werden

Gregory J. Werden

U.S. Department of Justice - Antitrust Division

Luke M. Froeb

Vanderbilt University - Owen Graduate School of Management

Abstract

This chapter first reviews the economic theory underlying the unilateral competitive effects of mergers, focusing on the Cournot model, commonly applied to homogeneous products; the Bertrand model, commonly applied to differentiated consumer products; and models of auctions and bargaining, commonly applied when a bidding process or negotiations are used to set prices. This chapter then reviews two classes of empirical methods used to make quantitative predictions of the unilateral effects of proposed mergers.

Keywords: antitrust, mergers, unilateral effects

JEL Classification: L41, L13, D43

Suggested Citation: Suggested Citation

Werden, Gregory J. and Froeb, Luke M., Unilateral Competitive Effects of Horizontal Mergers. Available at SSRN: https://ssrn.com/abstract=927913