A Note on Complementary Goods Mergers between Oligopolists with Market Power: Cournot Effects, Bundling and Antitrust

Masson Robert T. (), Dalkir Serdar () and Eisenstadt David ()
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Masson Robert T.: Cornell University, Ithaca, New York 14853, USA
Dalkir Serdar: Micra Inc., 1155 Connecticut Ave. NW, Ste. 900, Washington, DC 20036, USA
Eisenstadt David: Micra Inc., 1155 Connecticut Ave. NW, Ste. 900, Washington, DC 20036, USA

Review of Law & Economics, 2014, vol. 10, issue 1, 59-79

Abstract: Antitrust policy in the US and EU toward non-horizontal mergers between oligopolists is based on a strong presumption of Cournot effects and/or improvements in consumer welfare through post-merger bundling. We show that complementary goods mergers between firms that possess market power in their respective components markets do not always assure either. The analysis underscores the importance of fully specifying the nature of pre-merger rivalry among all market participants and the assumed distribution of consumer preferences when making predictions about the likely effects of such transactions.

Keywords: complementary goods; conglomerate mergers; bundling; antitrust; Cournot effects (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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DOI: 10.1515/rle-2013-0014

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