Horizontal Mergers, Structural Remedies and Consumer Welfare in a Cournot Oligopoly with Assets

Thibaud Vergé

No 2009-10, Working Papers from Center for Research in Economics and Statistics

Abstract: Competition authorities sometimes require that firms divest some of their assets to rivalsin order to allow a merger to take place. This paper extends the results of Farrell andShapiro [1990a] and shows that, in the absence of technological synergies, a merger ishighly unlikely to benefit consumers, even if it is subjected to appropriate structuralremedies. For instance, a merger may ultimately lead to a lower price only if at leasttwo different firms acquire the divested assets, and if the merging parties had relativelyimportant pre-merger market shares.

Pages: 24
Date: 2009
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: HORIZONTAL MERGERS, STRUCTURAL REMEDIES, AND CONSUMER WELFARE IN A COURNOT OLIGOPOLY WITH ASSETS (2010)
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