M&A advisory and the merger review process

Michele Bisceglia, Salvatore Piccolo and Emanuele Tarantino
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Michele Bisceglia: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, UniBg - Università degli Studi di Bergamo = University of Bergamo
Salvatore Piccolo: UniBg - Università degli Studi di Bergamo = University of Bergamo, Compass Lexecon, CSEF - Centre of Studies in Economics and Finance - UNISA - Università degli Studi di Salerno = University of Salerno
Emanuele Tarantino: LUISS - Libera Università Internazionale degli Studi Sociali Guido Carli [Roma], EIEF - Einaudi Institute for Economics and Finance - Einaudi Institute for Economics and Finance, CEPR - Center for Economic Policy Research

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Abstract: Two firms propose a merger to the antitrust authority. They are uninformed about the efficiencies generated by the merger, but can hire an expert to gather information on their behalf. The authority is also uninformed about the merger's efficiencies, but can run a costly internal investigation to learn them. We analyze the effect of the disclosure of the expert's contract on consumer welfare, and show that consumers are not necessarily better off with disclosure. This possibility result hinges on a free-riding problem between expert and authority in the information acquisition game, and is more relevant in highly competitive industries.

Keywords: Advice; Competition policy; Mergers; Advisory contract; Disclosure (search for similar items in EconPapers)
Date: 2023-03
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Published in International Journal of Industrial Organization, 2023, 87, pp.102919. ⟨10.1016/j.ijindorg.2023.102919⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04929057

DOI: 10.1016/j.ijindorg.2023.102919

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