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Negotiating remedies: Revealing the merger efficiency gains

Andreea Cosnita-Langlais () and Jean-Philippe Tropeano ()

International Journal of Industrial Organization, 2009, vol. 27, issue 2, 188-196

Abstract: This paper contributes to the economic analysis of merger control by taking into account the efficiency gains for the design of structural merger remedies when the competition authorities do not observe the magnitude of efficiency gains. We show that whenever divestitures are necessary, the Competition Authority will need to extract from the merging partners their private information on the merger's efficiency gains. For this we propose a revelation mechanism combining divestitures with two additional tools, the regulation of the divestitures sale price and a merger fee. We show that an optimal combination of both instruments is effective: the most efficient merged firms are to pay a merger fee while the less efficient divest assets at an upwards distorted sale price.

Keywords: Merger; control; Structural; merger; remedies; Asymmetric; information (search for similar items in EconPapers)
Date: 2009
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Related works:
Working Paper: Negotiating remedies: Revealing the merger efficiency gains (2009)
Working Paper: Negotiating remedies: Revealing the merger efficiency gains (2009)
Working Paper: Negotiating remedies: revealing the merger efficiency gains (2008) Downloads
Working Paper: Negotiating remedies: revealing the merger efficiency gains (2006) Downloads
Working Paper: Negotiating remedies: revealing the merger efficiency gains (2005) Downloads
Working Paper: Negotiating remedies: revealing the merger efficiency gains (2005) Downloads
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