Dynamic Merger Review

Volker Nocke and Michael Whinston

No 14526, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We analyze the optimal dynamic policy of an antitrust authority towards horizontal mergers when merger proposals are endogenous and occur over time. Approving a currently proposed merger will affect the profitability and welfare effects of potential future mergers, the characteristics of which may not yet be known to the antitrust authority. We show that, in many cases, this apparently difficult problem has a simple resolution: an antitrust authority can maximize discounted consumer surplus by using a completely myopic merger review policy that approves a merger today if and only if it does not lower consumer surplus given the current market structure.

JEL-codes: L0 L4 (search for similar items in EconPapers)
Date: 2008-12
New Economics Papers: this item is included in nep-com, nep-ind and nep-reg
Note: IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published as Volker Nocke & Michael D. Whinston, 2010. "Dynamic Merger Review," Journal of Political Economy, University of Chicago Press, vol. 118(6), pages 1201 - 1251.

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Related works:
Journal Article: Dynamic Merger Review (2010)
Working Paper: Dynamic Merger Review (2008)
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