Negotiating remedies: Revealing the merger efficiency gains

Jean-Philippe Tropeano and Andreea Cosnita-Langlais

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: This paper contributes to the economic analysis of merger control by taking into account the efficiency gains for the design of structural merger remedies when the competition authorities do not observe the magnitude of efficiency gains. We show that whenever divestitures are necessary, the Competition Authority will need to extract from the merging partners their private information on the merger's efficiency gains. For this we propose a revelation mechanism combining divestitures with two additional tools, the regulation of the divestitures sale price and a merger fee. We show that an optimal combination of both instruments is effective: the most efficient merged firms are to pay a merger fee while the less efficient divest assets at an upwards distorted sale price.

Keywords: MERGER CONTROL; STRUCTURAL MERGER REMEDIES; ASYMETRIC INFORMATION (search for similar items in EconPapers)
Date: 2009-03
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Citations: View citations in EconPapers (14)

Published in International Journal of Industrial Organization, 2009, 27 (2), pp.188. ⟨10.1016/j.ijindorg.2008.06.003⟩

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Related works:
Journal Article: Negotiating remedies: Revealing the merger efficiency gains (2009)
Working Paper: Negotiating remedies: Revealing the merger efficiency gains (2009)
Working Paper: Negotiating remedies: revealing the merger efficiency gains (2008)
Working Paper: Negotiating remedies: revealing the merger efficiency gains (2006)
Working Paper: Negotiating remedies: revealing the merger efficiency gains (2005)
Working Paper: Negotiating remedies: revealing the merger efficiency gains (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-00643693

DOI: 10.1016/j.ijindorg.2008.06.003

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