Negotiating remedies: revealing the merger efficiency gains

Andreea Cosnita-Langlais and Jean-Philippe Tropeano

Working Papers from Grenoble Applied Economics Laboratory (GAEL)

Abstract: This paper contributes to the economic analysis of merger control by taking into account the efficiency gains for the design of structural merger remedies when the competition authorities do not observe the magnitude of efficiency gains. We show that whenever divestitures are necessary, the Competition Authority will need to extract from the merging partners their private information on the merger’s efficiency gains. For this we propose a revelation mechanism combining divestitures with two additional tools, the regulation of the divestitures sale price and a merger fee. We show that an optimal combination of both instruments is effective: the most efficient merged firms are claimed to pay a merger fee while the less efficient divest asets at an upwards distorted sale price.

Keywords: MERGER CONTROL; STRUCTURAL MERGER; REMEDIES; ASYMETRIC INFORMATION (search for similar items in EconPapers)
JEL-codes: D82 K21 L41 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-bec, nep-com, nep-cta, nep-law and nep-reg
References: Add references at CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Negotiating remedies: Revealing the merger efficiency gains (2009)
Working Paper: Negotiating remedies: Revealing the merger efficiency gains (2009)
Working Paper: Negotiating remedies: Revealing the merger efficiency gains (2009)
Working Paper: Negotiating remedies: revealing the merger efficiency gains (2006)
Working Paper: Negotiating remedies: revealing the merger efficiency gains (2005)
Working Paper: Negotiating remedies: revealing the merger efficiency gains (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:gbl:wpaper:200803

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