Merger Control in a Changing World

Volker Nocke (), Martin Peitz () and Nicolas Schutz ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: How should merger control account for future changes in market conditions? We study horizontal merger policy in the presence of industry-wide cost or demand shocks, using both a homogeneous-goods Cournot model and a multiproduct-firm model of price competition with constant elasticity of substitution (CES) or multinomial logit (MNL) demand. We derive two main sets of results. First, regarding deterministic shocks: under both Cournot competition with incomplete pass-through and multiproduct firm price competition, an adverse shock increases industry concentration but calls for softer merger control. Second, regarding cost or demand uncertainty: under a cautious maxmin approach, aggregate cost uncertainty calls for softer merger control under the same assumptions. By contrast, under a risk-neutral expected-consumer-surplus stan dard, greater cost uncertainty demands tougher merger control in the Cournot model with log-concave demand, and in the multiproduct-firm price competition model when the outside option is sufficiently attractive.

Keywords: merger control; market concentration; cost shocks; demand shocks; pass through; resilience (search for similar items in EconPapers)
JEL-codes: D43 K21 L13 L40 L41 (search for similar items in EconPapers)
Pages: 34
Date: 2026-06
New Economics Papers: this item is included in nep-com and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.crctr224.de/research/discussion-papers/archive/dp754 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2025_754

Access Statistics for this paper

More papers in CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany Kaiserstr. 1, 53113 Bonn , Germany.
Bibliographic data for series maintained by CRC Office ().