On the Desirability of an Efficiency Defense in Merger Control
Paul Heidhues () and
Johan Lagerlof ()
No 3841, CEPR Discussion Papers from C.E.P.R. Discussion Papers
We develop a model in which two firms that have proposed to merge are privately informed about merger-specific efficiencies. This enables the firms to influence the merger control procedure by strategically revealing their information to an antitrust authority. Although the information improves upon the quality of the authority’s decision, the influence activities may be detrimental to welfare if information processing/gathering is excessively costly. Whether this is the case depends on the merger control institution and, in particular, whether it involves an efficiency defense. We derive the optimal institution and provide conditions under which an efficiency defense is desirable. We also discuss the implications for antitrust policy and outline a three-step procedure that takes the influence activities into consideration.
Keywords: antitrust; asymmetric information; disclosure; efficiency gains; lobbying; rent seeking (search for similar items in EconPapers)
JEL-codes: D72 D82 K21 L40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at email@example.com
Journal Article: On the desirability of an efficiency defense in merger control (2005)
Working Paper: On the Desirability of an Efficiency Defense in Merger Control (2004)
Working Paper: On the Desirability of an Efficiency Defense in Merger Control (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:3841
Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... ers/dp.php?dpno=3841
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().