Do remedies affect the efficiency defense? An optimal merger-control analysis

Andreea Cosnita-Langlais and Jean-Philippe Tropeano

International Journal of Industrial Organization, 2012, vol. 30, issue 1, 58-66

Abstract: This paper examines the optimal use of remedies and the efficiency defense for merger control. We develop a framework in which merger efficiency gains are endogenously determined and are not observed by the Competition Authority. The possibility of an efficiency defense can push firms to design the merger better, leading to greater efficiency gains. Firms can also submit remedies to the Competition Authority: they interact with the efficiency defense, by reducing the firm's incentive to enhance efficiency. At the same time remedies improve the assessment of the merger, in particular by signaling the true level of efficiency gains. We ask to what extent it may be optimal to make use of both instruments simultaneously, and thus discuss the possibility that the Competition Agency refrain from using one of the instruments to try to improve overall merger-control performance.

Keywords: Merger control; Efficiency defense; Merger remedies (search for similar items in EconPapers)
JEL-codes: D82 K21 L41 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167718711000592
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Do remedies affect the efficiency defense? An optimal merger-control analysis (2012)
Working Paper: Do remedies affect the efficiency defense? An optimal merger-control analysis (2012)
Working Paper: Do remedies affect the efficiency defense? An optimal merger-control analysis (2012)
Working Paper: On the Effective Design of the Efficiency Defence (2006)
Working Paper: On the effective design of the efficiency defence (2006)
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:eee:indorg:v:30:y:2012:i:1:p:58-66

DOI: 10.1016/j.ijindorg.2011.05.004

Access Statistics for this article

International Journal of Industrial Organization is currently edited by P. Bajari, B. Caillaud and N. Gandal

More articles in International Journal of Industrial Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().