Assessment of post-merger coordinated effects: Characterization by simulationsAuthor-Name: Ivaldi, Marc

Vicente Lagos

International Journal of Industrial Organization, 2017, vol. 53, issue C, 267-305

Abstract: This paper aims at evaluating the coordinated effects of horizontal mergers by simulating their impact on firms’ critical discount factors. We consider a random coefficient model on the demand side and heterogeneous price-setting firms on the supply side. Results suggest that mergers strengthen the incentives to collude of the merged firm, but weaken the incentives of non-merging parties, with the former effect being stronger. To assess the magnitudes of these effects, we introduce the concepts of Asymmetry in Payoffs and Change in Payoffs effects, which allow us to identify appropriate screening tools according to the relative pre-merger payoffs of merging parties.

Keywords: Collusion; Coordinated effects; Critical discount factor; Merger simulation (search for similar items in EconPapers)
JEL-codes: K21 L41 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:53:y:2017:i:c:p:267-305

DOI: 10.1016/j.ijindorg.2016.04.009

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