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Unilateral effects of partial acquisitions: consistent calculation of GUPPI under horizontal merger guidelines within the EU

Panagiotis Fotis, Michael Polemis and Konstantinos Eleftheriou

Economia e Politica Industriale: Journal of Industrial and Business Economics, 2017, vol. 44, issue 3, No 3, 315-325

Abstract: Abstract We derive a consistent formula of the Gross Upward Pricing Pressure Index (GUPPI) with Council Regulation Horizontal Merger Guidelines (2004) by: (i) expressing the amount of acquired equity stake as a function of the market share of the victim firm and (ii) assuming a logit demand function. The results show that the anti-competitive effects of partial acquisitions are higher in this case than under partial acquisitions with constant equity stakes and that competition authorities should be skeptical when they use traditional screening indicators in order to estimate the unilateral effects of partial acquisitions in Bertrand markets with differentiated products.

Keywords: Partial acquisitions; GUPPI; Logit demand; Merger control; Unilateral effects (search for similar items in EconPapers)
JEL-codes: D43 L13 L41 (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (1)

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DOI: 10.1007/s40812-016-0053-6

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Economia e Politica Industriale: Journal of Industrial and Business Economics is currently edited by C. Cambini, M.G. Colombo, L. Piscitello, L. Rondi and A. Zanfei

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