Assessment of Post-merger Coordinated Effects: Characterization by Simulations

Marc Ivaldi and Vicente Lagos

No 16-631, TSE Working Papers from Toulouse School of Economics (TSE)

Abstract: This paper aims to evaluate the coordinated effects of horizontal mergers by simulating its impact on firms’ critical discount factors. The simulation setting considers a model with a random coefficient discrete choice demand and heterogeneous price-setting firms on the supply side. The results suggest that mergers strengthen the incentives to collude among merging parties, but weaken the incentives of non-merging parties. In addition, while the magnitude of this impact is moderate for the latter, it can be substantial for merging parties. Finally, general policy lessons regarding the assessment of the magnitude of these effects can be drawn from the results.

Keywords: Assessment; -; Collusion; -; Coordinated; effects; -; Critical; Discount; Factor; -; Merger; Simulation (search for similar items in EconPapers)
Date: 2016-03
New Economics Papers: this item is included in nep-cmp, nep-com and nep-dcm
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Citations: View citations in EconPapers (1)

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Working Paper: Assessment of Post-merger Coordinated Effects: Characterization by Simulations (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:tse:wpaper:30295

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