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
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: Suggested Citation