A Political Economy Model of Merger Policy in International Markets

Massimo Motta and Michele Ruta ()

No 6894, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper looks at the political economy of merger policy under autarky and in international markets. We assume that merger policy is decided by antitrust authorities (whose objective is to maximize welfare) but can be influenced by governments, which are subject to lobbying by the firms (be they insiders or outsiders to the merger). We argue that political economy distortions may explain some of the recently observed merger policy conflicts between authorities and politicians, as well as between institutions belonging to different countries. We illustrate our analysis with applications motivated by recent merger cases, which have been widely debated in the international press.

Keywords: Antitrust policy; European Union; Lobbying; Mergers (search for similar items in EconPapers)
JEL-codes: D72 F59 H11 L40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-com, nep-ind and nep-pol
Date: Written 2008-06

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