Optimal Merger Remedies

Volker Nocke () and Andrew Rhodes ()
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Volker Nocke: University of Mannheim = Universität Mannheim, CEPR - Center for Economic Policy Research
Andrew Rhodes: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements 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, CEPR - Center for Economic Policy Research

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Abstract: We develop a framework to study horizontal mergers when the parties can propose remedies to an antitrust authority. Remedies are modeled as asset divestitures, which make the firm receiving the assets more efficient at the expense of the merged firm. We consider both the case where the merger affects a single market and where it affects multiple markets. Solving for the merging firms' optimal proposal, we investigate when it involves remedies—and if so, which assets should be divested, and to whom, and how this depends on market characteristics such as the level of competitiveness.

Keywords: Structural remedies; Divestitures; Data; Horizontal mergers; Antitrust (search for similar items in EconPapers)
Date: 2025-08-14
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