Unilateral Competitive Effects of Horizontal Mergers I: Basic Concepts and Models

Issues in Competition Law and Policy, 2008

23 Pages Posted: 22 Oct 2006 Last revised: 5 Jan 2010

Date Written: January 5, 2010

Abstract

Horizontal mergers give rise to unilateral anticompetitive effects if they cause the merged firm to act less intensely competitive than the merging firms, while non-merging rivals do not alter their competitive strategies. This chapter describes the economic theory underlying unilateral competitive effects from mergers and the quantitative application of this theory in predicting the unilateral price effects of proposed mergers. This chapter focuses on unilateral effects in homogeneous products industries described by the Cournot model and unilateral effects in differentiated products industries described by the Bertrand model.

Keywords: antitrust, mergers, unilateral effects

JEL Classification: L41, L13, D43

Suggested Citation

Werden, Gregory J., Unilateral Competitive Effects of Horizontal Mergers I: Basic Concepts and Models (January 5, 2010). Issues in Competition Law and Policy, 2008. Available at SSRN: https://ssrn.com/abstract=939033

Gregory J. Werden (Contact Author)

Independent ( email )

No Address Available

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