Unilateral Competitive Effects of Horizontal Mergers Ii: Auctions and Bargaining

Werden, Gregory J.; Froeb, Luke M.

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Unilateral Competitive Effects of Horizontal Mergers Ii: Auctions and Bargaining

ABA Antitrust Section, Issues in Competition Law and Policy

15 Pages Posted: 15 Jan 2007 Last revised: 5 Jan 2010

See all articles by Gregory J. Werden

Gregory J. Werden

Independent; George Mason University - Mercatus Center

Luke M. Froeb

Vanderbilt University - Owen Graduate School of Management

Date Written: 2008

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 when prices are set through an auction or bargaining process. In the auction context, this chapter also describes the quantitative application of this theory in predicting the unilateral price effects of proposed mergers.

Keywords: mergers, auctions, bargaining

JEL Classification: L41, L13

Suggested Citation: Suggested Citation

Werden, Gregory J. and Froeb, Luke M., Unilateral Competitive Effects of Horizontal Mergers Ii: Auctions and Bargaining (2008). ABA Antitrust Section, Issues in Competition Law and Policy, Available at SSRN: https://ssrn.com/abstract=956400