Merger Guidelines for Bidding Markets
Philippe Gagnepain () and
David Martimort
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Philippe Gagnepain: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL
Abstract:
We propose merger guidelines for bidding markets through the construction of a simple test. It is applied in the particular context of the French urban transport industry. It designs the optimal auction and captures two opposite forces at stake: on the one hand, the optimal auction is biased against a merger due to a loss of competition; on the other hand, potential efficiency gains bias the optimal allocation towards the merger firm. The two effects can be nested in a single equation condition which determines whether the merger improves the consumer net surplus. We suggest that the merger between Transdev and Veolia is consumer surplus improving if the efficiency gains from the merger allow both firms to decrease their initial costs inability by at least 17.9% and 17.8% respectively.
Keywords: transports; publics; urbains (search for similar items in EconPapers)
Date: 2016
Note: View the original document on HAL open archive server: https://hal.science/hal-01314036v1
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Published in Revue Economique, 2016, Nouveaux regards en économie et politique de la concurrence, 67 (Hors-série), pp.69-78. ⟨10.3917/reco.hs01.0069⟩
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Related works:
Journal Article: Merger Guidelines for Bidding Markets (2016) 
Working Paper: Merger Guidelines for Bidding Markets (2016) 
Working Paper: Merger Guidelines for Bidding Markets (2016) 
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:hal-01314036
DOI: 10.3917/reco.hs01.0069
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