Can foreclosure benefit consumers? The case of innovation in new markets

Alexandre Carbonnel ()
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Alexandre Carbonnel: NERA Economic Consulting

Economics Bulletin, 2021, vol. 41, issue 3, 1471-1480

Abstract: Innovation concerns have been at the core of some recent horizontal and non-horizontal mergers. This has led to a growing literature that has specifically focused on horizontal mergers. In this paper, I show that foreclosure may benefit consumers in non-horizontal mergers when firms compete to innovate in a new market. This is because it may allow consumers to benefit from an innovation to which they would not have access to in the absence of foreclosure. I determine the conditions leading to this conclusion and argue that a cautious approach to foreclosure by competition authorities is warranted when firms compete to innovate in a new

Keywords: Mergers; foreclosure; innovation (search for similar items in EconPapers)
JEL-codes: K2 L1 (search for similar items in EconPapers)
Date: 2021-09-17
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Citations: View citations in EconPapers (1)

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