Bargaining Over Remedies in Merger Regulation

CCP Working Paper No. 07-3

27 Pages Posted: 20 Mar 2007  

Bruce Lyons

University of East Anglia

Andrei Medvedev

Government of the United Kingdom - Financial Services Authority

Date Written: February 2007

Abstract

This paper provides a first attempt to understand how outcomes are determined by the standard institutions of merger control. In particular, we focus on the internationally standard 2-phase investigation structure and remedy negotiations of the form practiced by the EC. We find that there are inherent biases in remedy outcomes, and identifiable circumstances where offers will be excessive and where they will be deficient. In particular, we find clear circumstances in which firms offer excessive remedies, which goes against a possible intuition that firms should expect to extract an information rent for possessing superior information about competition in the market.

Keywords: Merger regulation, merger remedies, competition policy, bargaining

JEL Classification: K21, L41, L51

Suggested Citation

Lyons, Bruce and Medvedev, Andrei, Bargaining Over Remedies in Merger Regulation (February 2007). CCP Working Paper No. 07-3. Available at SSRN: https://ssrn.com/abstract=970250 or http://dx.doi.org/10.2139/ssrn.970250

Bruce Lyons (Contact Author)

University of East Anglia ( email )

Norwich Research Park
Norwich, Norfolk NR4 7TJ
United Kingdom

Andrei Medvedev

Government of the United Kingdom - Financial Services Authority ( email )

25 The North Colonnade
Canary Wharf
London E14 5HS
United Kingdom

HOME PAGE: http://andrei-medvedev.blogspot.co.uk/

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