Merger Remedies in Oligopoly under a Consumer Welfare Standard

Markus Dertwinkel-Kalt () and Christian Wey

The Journal of Law, Economics, and Organization, 2016, vol. 32, issue 1, 150-179

Abstract: We analyze the welfare effects of structural remedies on merger activity in a Cournot oligopoly if the antitrust agency applies a consumer surplus standard. We derive conditions such that otherwise price-increasing mergers become externality-free by the use of remedial divestitures. In this case, the consumer surplus standard ensures that mergers are only implemented if they increase social welfare. If the merging parties can extract the entire surplus from the asset sale, then the socially optimal buyer will be selected under a consumer standard. (JEL L13, L41, K21)

Date: 2016
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Working Paper: Merger remedies in oligopoly under a consumer welfare standard (2015)
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